Skip to content
Welcome! Are you part of the community? Sign up now.
x

Posted almost 13 years ago

ARV's and Their Importance

I always try to get at least 6 comps to come up with a solid ARV before going on an appointment. If there are more homes that fit my criteria as a similar home; I use them too... the more comps I have, the more confident I am with my ARV. You also need to be looking at the listed homes (they are your competition when selling/marketing to buyers) and expired listings (why couldn't those homes sale in that area?).

When I am out on an appointment I use the lowest (honest) ARV possible. I never cherry pick my comps but I want the seller to focus on the low priced homes that have recently sold in the area. I have found that most sellers are shocked when I show them what some homes have sold for and this helps me lower their expectations.

I know the seller is going to be floored when I hit them with my initial offer, so it is best that I constantly try to lower these expectations. I also try to disqualify them as a potential deal for me and let the seller convince me to buy their home.

Back on subject:

Your ARV is probably the most important part of making profits on any RE deal. If you miss you're ARV by 10%, you will most likely not be able to assign the property and you'll be forced to back out of the deal or close on the house (and possibly lose money on the rehab)... both situations are bad for you and your RE investing reputation.

You also don't want to market your house with an unrealistic ARV. Investors will quickly label you as a short-minded crooked wholesaler and I am sure that's a label that is hard to remove. The RE Investing community is relatively small and it is ran from networking and word of mouth. Do good business ; your name will slowly spread through the community and your phone will begin to ring... do bad business; your name will spread like wildfire, and you'll find that people don't take your calls. Make sure you're getting your ARV's right and you'll quickly become an asset to your buyers.

If you're not confident in your ARV, you need to get a second set of eyes to look at the deal. I am always quick to call my network when I have questions about a deal.  I learn best from people with experience.

I hope you nail the ARV and make huge profits!

Stinson Bland


Comments