Calculating ARV for Fix n Flip in current DC market?
Member since 2019 · 48 posts · 12 votes
Calculating ARV for Fix n Flip in current DC market?
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1yQuote from @Russell Brazil:
Quote from @Chris Nerio:
I am currenlty looking for my 2nd flip in DC, 3rd flip total. With relatively little experience with a market trending down, I wanted to get some insight into how other flippers are mitigating their risk in current DC market conditions. Some questions I have are:
1. If you use the 70% rule, are you using 65% or 60% rule now for example? Is this dependent on certain data points? If so what data?
2. What data are you considering more now other than just comps to come up with ARV? More DOM? Lower ARV in general, for example, house just sold for $500k in May '25, how much lower will you lower yours, if any, taking into account DOM are increasing, price cuts, etc?
3. Is any of this even relevant because I should just target zipcodes/neighborhoods that match my buyers box and show homes are still moving? The concern with this is that I may be priced out of these neighborhoods
Appreciate the response, thank you!
Percentage rules don't matter. Look at actual profit. Most flippers in DC are willing to take a $50-60k profit on properties around or under $1 million.
Agree, its about how much you willing to make not a percentage - as my wife says - she never asks what percentage return am I putting in the bank account - she asks how much $ is going into the account..
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4 Replies
- Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes1yLook at comps and price in a lower ARV by 5%.
Quote from @Chris Nerio:
I am currenlty looking for my 2nd flip in DC, 3rd flip total. With relatively little experience with a market trending down, I wanted to get some insight into how other flippers are mitigating their risk in current DC market conditions. Some questions I have are:
1. If you use the 70% rule, are you using 65% or 60% rule now for example? Is this dependent on certain data points? If so what data?
2. What data are you considering more now other than just comps to come up with ARV? More DOM? Lower ARV in general, for example, house just sold for $500k in May '25, how much lower will you lower yours, if any, taking into account DOM are increasing, price cuts, etc?
3. Is any of this even relevant because I should just target zipcodes/neighborhoods that match my buyers box and show homes are still moving? The concern with this is that I may be priced out of these neighborhoods
Appreciate the response, thank you!
Percentage rules don't matter. Look at actual profit. Most flippers in DC are willing to take a $50-60k profit on properties around or under $1 million.
District Invest Group545 Reviews- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes1y
Quote from @Russell Brazil:
Look at comps and price in a lower ARV by 5%.Quote from @Chris Nerio:
I am currenlty looking for my 2nd flip in DC, 3rd flip total. With relatively little experience with a market trending down, I wanted to get some insight into how other flippers are mitigating their risk in current DC market conditions. Some questions I have are:
1. If you use the 70% rule, are you using 65% or 60% rule now for example? Is this dependent on certain data points? If so what data?
2. What data are you considering more now other than just comps to come up with ARV? More DOM? Lower ARV in general, for example, house just sold for $500k in May '25, how much lower will you lower yours, if any, taking into account DOM are increasing, price cuts, etc?
3. Is any of this even relevant because I should just target zipcodes/neighborhoods that match my buyers box and show homes are still moving? The concern with this is that I may be priced out of these neighborhoods
Appreciate the response, thank you!
Percentage rules don't matter. Look at actual profit. Most flippers in DC are willing to take a $50-60k profit on properties around or under $1 million.Agree, its about how much you willing to make not a percentage - as my wife says - she never asks what percentage return am I putting in the bank account - she asks how much $ is going into the account..
7e investments53 Reviews
- Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes1y
Quote from @Chris Nerio:
I am currenlty looking for my 2nd flip in DC, 3rd flip total. With relatively little experience with a market trending down, I wanted to get some insight into how other flippers are mitigating their risk in current DC market conditions. Some questions I have are:
1. If you use the 70% rule, are you using 65% or 60% rule now for example? Is this dependent on certain data points? If so what data?
2. What data are you considering more now other than just comps to come up with ARV? More DOM? Lower ARV in general, for example, house just sold for $500k in May '25, how much lower will you lower yours, if any, taking into account DOM are increasing, price cuts, etc?
3. Is any of this even relevant because I should just target zipcodes/neighborhoods that match my buyers box and show homes are still moving? The concern with this is that I may be priced out of these neighborhoods
Appreciate the response, thank you!Honestly with the war D.C. is right now it’s possible you get a home run or possible you get crushed the market is an unstable a market I’ve seen in the decade I’ve been studying the dc metro housing market, I’d say ultimately it comes down to your risk tolerance if your ok losing money there could be some good opportunities if you can’t afford that, I wouldn’t be investing right now, you also need to really track the sub-markets you are in some parts of D.C. do move if slowly & at a discount other parts you can’t give a property away.
- Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes1y
Quote from @Chris Nerio:
I am currenlty looking for my 2nd flip in DC, 3rd flip total. With relatively little experience with a market trending down, I wanted to get some insight into how other flippers are mitigating their risk in current DC market conditions. Some questions I have are:
1. If you use the 70% rule, are you using 65% or 60% rule now for example? Is this dependent on certain data points? If so what data?
2. What data are you considering more now other than just comps to come up with ARV? More DOM? Lower ARV in general, for example, house just sold for $500k in May '25, how much lower will you lower yours, if any, taking into account DOM are increasing, price cuts, etc?
3. Is any of this even relevant because I should just target zipcodes/neighborhoods that match my buyers box and show homes are still moving? The concern with this is that I may be priced out of these neighborhoods
Appreciate the response, thank you!My response is location independent. We calculate potential After Repair Value based on recently sold market data. The 65% or 70% rules are established by lenders to minimize their risks. If a lender has to foreclose on a property there is still room for the lender profit.
Reading between the lines what you are really asking about is pricing strategies. The price we establish to pay for a property is based on our company return on investment (ROI) objectives. Those objectives take into the market DOM data. When a renovation is complete if we can meet our ROI objectives pricing a property below market rate then that's what we will do. Every week we will monitor market data & if we see that we are not getting any offers, showings or is the highest price property in the market then we will drop the price.
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