Extensive Range of ARV
So I found a 2-Family property located in a neighborhood that my investors buy property. The property has been listed on the mls for less than 1day and is a distressed property in need of rehab that is owned by an elderly man and is NOT an REO or short sale but is located in an area with plenty of short sales. Here is my problem, the owner states that he will be responsible for removing the underground oil tank. The agent told me to get as close to the $95,000 list price as possible as the owner will need money to remove the tank. My estimated repairs are approximately $25,000 -$ 30,000 however, my comps in the neighborhood range from $165,000 - $260,000 depending on the extend of renovations and other typical appraisal adjustments. Most of the comps are around $185,000 but a very few that have extensive rehab in the area closed at $260,000. These comps are similar in size and appeal. So what do I do when determining ARV? Use conservative comp @ $185,000 or the few lingering comps @ $260,000. Similar distressed comps in this area range from $60,000 - $120,000 depending on extent of repairs and type of sale (Reo,short,etc). What the heck do I do now as I am going to look at the property tomorrow and need to make an appropriate offer? What should my ARV formula reflect? This could be my first potential wholesale deal and I pray that it works out. Thanks BP