Comping deals on propstream.

[La'Terrius Campbell]

I'm comping in a area in Detroit that doesn't really have any fixer upper homes near the one I'm trying to wholesale, so what do I do to determine the ARV and determine my MAO? Do I just comp it with the other distressed homes?

[Duane Alexander]

Instead of the typical approach of finding a fixed up home to determine your ARV then subtracting repairs and your fee to formulate your MAO try this approach. Find the as is properties that were bought with cash by an LLC in similar condition to your subject property's current condition. If a property was bought for 20k cash, as is, by an LLC that tells you that you can probably wholesale your subject property to an investor for a comparable price. This is your as is comp. You probably need to get the property for a little less than this which will be your profit/wholesale fee. Do this and you just calculated your offer price without calculating ARV or repairs. I like this approach a little better because it's easier, faster, and you don't spend time trying to compute repairs or ARV when you don't know what the heck your buyer is going to do with the property in the first place. It also works in cases like yours where's there's not a renovated home to use to determine ARV.