I am looking to put an offer in on a duplex and need to determine what my ARV would be. The duplex was built in the 60's and is located on an acre of land in the area's prime school district. Across the street is a new sub-division (built within the last 5 or so years).. All of the SFH houses in that area range from 250-400k. Problem is, there are no near by duplexes to determine what my ARV may end up at. I would assume these SFH's would bring up the value of the duplex, but to what extent?
I plan to rehab the interiors of these units to fit in with their nearby counterpart SFH's. Probably a long shot. But what do you do when it difficult to find comps?
My apologies for the title mishap... "How do/would you assess ARV.."
If only I could go back and edit that!!
Keep increasing the raidious of you search for comps until you find 3 comps.
@Jeremy Mattson - You may need to do a combo sq ft/sales comp and/or determine it's value based on how far under market the tax appraisals run. Do you have a realtor that can run a CMA? Some will do it free or for a small fee.
Thanks @Brian Van Pelt
I can keep expanding my radius, however they no longer come with the acreage, are in an older part of town, and aren’t in the desired school districts that this duplex is.
@Greg Scully Thanks! I can check with my realtor if they can run a CMA. Do properties within the same area typically sell at a similar ratio of sale price to tax appraisal price?
@Jeremy Mattson - That's something I've heard passed around more than I've put into practice. I've heard market is "x% over tax appraisal". Might be worth running by your realtor.
Get as close as you can in comps (maybe minus the acreage) and then make a conservative educated guess on the added value that your acreage adds to the mix.
Not to be Debbie Downer, but I'm betting you get hammered on your value.
If you've got all these new beautiful houses in a sparkling subdivision and your house is a duplex built in the 60's, you're not really comparable. If the only duplexes they can use are similar in condition, style, design and appeal with the only differences being acreage, school systems and a different part of town, an appraiser will use those comps and savage your value.
I hope not, but my experience is they'll give value to the duplexes over new subdivisions.