Determining the correct ARV on a Duplex, Triplex, or SFH for a 1st-Time Buy & Hold
Hello there Bigger Pockets Community,
I just want to quickly say that this website is a tremendous wealth of knowledge, and I'm so happy to have stumbled onto it! It's helped move me along in expanding my knowledge of real estate investing, and I couldn't be more thankful for the resources at hand.
That being said, I am still a 24 year old novice that hasn't broken onto the scene yet, and I have a few questions that hopefully somebody can answer or lend some insight. Though I do have the basics down, take these questions as if I know next to nothing.
My current situation is that I plan on moving to Reno, NV within the next month or two, as I'm currently about 40 minutes away in Truckee, CA. What I would like to do is find a duplex, triplex, or SFH with 3+ bedrooms that may or may not need some work, live in one part of the home, and rent out the rest as soon as the place is in rentable shape. I wouldn't mind living close to the university campus, as students are generally good tenants to have (as long as they don't trash the hell out of the place.)
For financing, I have a few options. With a steady job, I should be able to qualify (hopefully) for an FHA loan or 203k, which would only require a 3.5% down payment, plus the PMI.
Another option is my father, who has roughly 100k set aside for this type of investment, and would be happy to help out with fixing up the place and funding his portion of the deal, such as the normal 20% down on a traditional loan.
My first question is- how exactly do I determine the proper ARV of a place? With hybrid investing of buying low and holding to rent, I know that appreciation isn't much of a concern, but I'm still afraid of buying something overvalued and losing money somehow. Or of buying something and then not being able to find renters to cover my mortgage & cash flow. Reno is flooded with short sales, preforeclosures, and foreclosures, but when I look up comparables on the MLS or Zillow with similar bed/bath and square footage in the neighborhood, they're sometimes all over the map. Am I being too paranoid? Should I just find one that I like, stick with it, and get renters in there ASAP without worrying about the house's value in a year or two or three?
Similarly, I would also like to move in within the next two months, if possible. My question is, am I being unrealistic in my time frame? I know some deals may take months to go through, and I obviously don't want to mistakenly rush into a bad deal, but I'd love to save myself a couple hundred dollars in rent and start paying my own mortgage right away, rather than someone else's. Is this just getting greedy?
And lastly, I feel like all of the properties that I'm finding on the MLS are there because all of the good deals have already been found. I'll find a good house, search for its "Zestimate" on Zillow, and find that it's usually listed for right around the price that it's estimated for. Should I forget using Zillow and only look up comps on the MLS?
Anyway, sorry for rambling and asking so much, but I figured somebody out there could shed some light or offer some guidance to this newbie. I really love reading the success stories and other great questions in the forums here, I just am longing for the day when I can finally breath a sigh of relief after my first property starts rolling in some cash.
Thanks so much!
-Riley Harrison