How to determine the ARV correctly

[Joy Baker]

How do you determine the ARV correctly ?

[Kuba F.]

@Joy Baker you calculate ARV by comparing it to other properties that sold in the neighborhood, ones that are similar to the condition in which you expect to sell your subject property. This determines the market value, or the price that people have proven they are willing to spend on a similar property.

When finding appropriate comps, try to find properties that fit these criteria:

• have sold within the previous 3-6 months;
• are within the neighborhood geographic boundaries (*);
• have similar features;
• are approximately the same square footage;
• and are of similar construction and finishings

This is a common question, so I just released a bigger pockets blog post that goes into more detail about it:

https://www.biggerpockets.com/blogs/8814/68395-how-to-find-real-estate-comps-and-calculate-after-repair-value