How do you calculate ARV with no comp data available?

9 Replies

I've checked the MLS, Zillow, Trulia, Redfin and I can't find any accurate comp data. Is this just an awful neighborhood? The house is a multi family so I'm not sure if I can use the average Price/Sqft method. Someone please help! Thanks in advance.

Are you looking at purchasing a house or selling a house you own?

Have you talked to a realtor?  They will have access to more tools then you will on any of those sites.

When there are no similar comps, you should talk to a local realtor that is familiar with that neighborhood. Someone who knows the area very well and have done a good amount of business there to give you a better idea what it might be worth. The other option is call a local appraiser. They usually know which areas are good and which ones to avoid. Hope this helps.

Realtors don't have access to any special data unless they know of off-market stuff. With all the websites that feed over MLS data almost any consumer has access to the same info as a Realtor, for the most part.

Check your local property appraiser site. You can find sales through public records if they were off-market.

Lastly, you said it's a multifamily. How many units? Value is derived from three approaches, sales comparison (comps), income, and replacement cost plus land value. Depending on the property type, one or two of the approaches is typically more reliable. If you cannot find anything close you need to expand your search area/criteria or go back further in time and try to make an adjustment for market conditions. If there are truly no comps then your best bet is going to be valuing it on the income approach. You need to calculate NOI (net operating income) and then derive a cap rate from the market, then NOI/cap rate=value. Without knowing how this is done you are better off contacting a local appraiser to help you out.

I hate to beat a dead horse but check with a realtor.  I searched and found the realtor with the most closings in my area and went with him.  I give him plenty of listings so he doesn't mind looking up comps for me.  I usually have him do it before I ever make an offer.  Good Luck, Mike

Originally posted by @Zach Mitchell :

Realtors don't have access to any special data unless they know of off-market stuff. With all the websites that feed over MLS data almost any consumer has access to the same info as a Realtor, for the most part.

Check your local property appraiser site. You can find sales through public records if they were off-market.

Lastly, you said it's a multifamily. How many units? Value is derived from three approaches, sales comparison (comps), income, and replacement cost plus land value. Depending on the property type, one or two of the approaches is typically more reliable. If you cannot find anything close you need to expand your search area/criteria or go back further in time and try to make an adjustment for market conditions. If there are truly no comps then your best bet is going to be valuing it on the income approach. You need to calculate NOI (net operating income) and then derive a cap rate from the market, then NOI/cap rate=value. Without knowing how this is done you are better off contacting a local appraiser to help you out.

 If there are no sales comps there would be no cap rate comps.

@Anthony DiRico How did this play out for you? 

I am in the same situation. I am thinking of buying a 4-plex that needs about $75,000 rehab and would have an NOI of $17,724 but purchase price would be around $22,700 - $35,700.

Could anyone give me a little insight into ARV based on income?

Each unit would be rented for $675. With a $75k rehab, it would be pretty low maintenance for a few years.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Join the Largest Real Estate Investing Community

Basic membership is free, forever.