Learn how to estimate a property's After Repair Value by using comparable sales. The speaker explains why property size, location, type, and features matter, and warns against making inaccurate ARV assumptions that could tank your investment analysis.
Foreign dollar question. And this is what leads to your subjective analysis of ARV. So back to my case study of 50k purchase price with the assumption of 25k rehab potentially worth a hundred. Well, how did I get the hundred? I utilize some of these tips, right? The simplest is to pull comps, right? You're dealing with an agent most of the time, they should be able to produce that, no problem of recent sold. However, one thing I found over the many years of doing this is that even agents have a subjective view of subject property that could vary from you and your comfort and confidence level and using that as a valid comp. An example of this was one property that I was looking to acquire. It was sub meaning less than a thousand square foot. It was like 912 square foot for 3 2. The agent that I was working with on the said property sent me comps because I was, I was a little baffled as tiny three two house wasn't confident that anything was going to appraise near what I needed to for it to work. Excuse me. And they send me back comps with four twos at 1500 square feet. If you're not paying attention to the detail or the like kind of subject property, that could also vary and alter your assumption of arv, which could lead to inaccurate ARV numbers, right? So in that case property was extra bedroom, roughly 6, 700 square feet larger than my current subject property. That all matters, right? Home type. Is this a split level? Is this a single story? Does it have a basement? Is it a crawl space or is it a slab? Certain areas like school districts and locations, you got split levels where the home enters at the mid and goes up or down and it's considered a split level. Garages? Do we have garages? Are you on a main street? Young just did a presentation the other day of lesson learned on one of his case studies. On his first burp he bought a property right off of a main thorough road and it affected his ARV just a little, right? It actually affected more of the rental performance side than that. But that's a whole nother presentation. A bed bath count. My example is a 3:2 property sub 1000. However, the agent produced four twos which doesn't quite add up. It's a little bit larger in both square footage and bath count. So being very aware of this and in the we look to train you to find these things in multiple ways.
