Having trouble Estimating ARV due to property sales in my area

2 Replies

Hi eveyone, I have hit a bump when it comes to estimating my offer price on a home I am looking to renovate. Houses that have been recently sold are all distressed properties or foreclosures. Anyone have any ideas for how to estimate the ARV when dealing with situations like this?

@Joshua Harris

I don't really understand your question. You are trying to come to ARV so that you know what to offer? If you are going to renovate it, is it not a distressed property?
I'd look at homes that are similar square footage and condition within a 5-10 mile radius. Then I'd look at homes with a similar square footage that are in the condition you intend to end with, within the same 5-10 mile radius. Then figure a rehab budget. How do those 3 numbers correlate? What can you afford to offer considering the starting price, the rehab and the ARV?

Does that help? 

thanks for the reply, sorry the way I wrote that was weird. I understand how to do a market analysis in order to find the ARV (usually) and how to estimate rehab costs. My issue is that in order to do my market analysis and determine the ARV of the distressed property I intend to buy, like you said, I need to find houses in the area that have been rehabbed, or look nice, are similar in size, and have sold. However, all of the recently sold properties (up to 12 months) are distressed like the ond i want to buy, so I can't find comps for the potential after repair list price of the property I intend to buy.

Due to there being huge cost swings depending on the neighborhood, going 5-10miles away is not an option. 

I was wondering if anyone has a tip on how to do a market analysis in an area like the one I described.