Hey BP, quick question about coming up with ARVs.
While I am looking at some potential houses that would be a good flip or BRRR house, I'm having trouble coming up with a good ARV for them. The houses I'm looking at are in relatively smaller neighborhoods that don't have a lot of comps to back them up.
Would it be beneficial for me to consider becoming an appraiser (or at least going through the course material)? I've looked up what it would take to become an appraiser in my state and it looks pretty intensive (minimum of 150 hours of "Qualifying Education"). Would this be worth it?
I plan on taking a course soon that will give me the hours and knowledge to become an RE agent in my state. If I do decide that becoming an appraiser would be beneficial, would that create some sort of conflict of interest if I'm already an agent?
I'm still new to REI, so please don't make me feel dumb if I'm just talking crazy. I'd rather ask the dumb questions than to be the dumb person that doesn't ask them.
State to state and bank to bank are different on many things but I'm relatively confident in saying that you would not be able to be the appraiser on any purchase, sale, or refi that you would financially be a beneficiary of.
Not a dumb question. No doubt becoming an appraiser would be helpful in determining value - but not sure you need to go through that level of intense training to really achieve reasonable and consistent ARVs. It's like any other learned skill - just takes practice, patience and probably a bit of mentoring from a local realtor or investor.
I'd focus on 2 things to get better:
1) there's a lot of discussion about ARV, Comps, Value on BP -- do some reading and you'll quickly get some ideas/methods you can use. J.Scott, for example, explains multiple ways to look at calculating ARV in his book on flipping houses (no affiliation) and so do many other seasoned investors. Here's another example, written by Chad Carson that could be helpful: The Ultimate Guide to Quickly Calculating A Property ARV
2) look into finding a local realtor/investor that can spend some time on this with you and might be willing to show you the ropes a bit more hands on for your area.
Best of luck!
I'm looking for local investors that would be willing to talk to me. Unfortunately, I haven't had much luck within my area finding someone that is willing to help me. Most investors (Not all, since I haven't met all of them) are not very willing to discuss how to invest since I'm in a pretty small market. If they are willing to talk with me, they have nothing but horror stories and cautions going forward. I'm even having a hard time finding a local agent to assist me while I'm getting started (hence the main reason I'm looking into the appraiser info). I always tell them what I'm doing, what my goals are, and where I'm at right now. They usually say that they are really busy and suggest someone else, who does the same thing, or they stop talking with me all together.
I don't care what it takes, I'm going to become a real estate investor. It's just a matter of time for me until the pieces start falling into place (because I am super determined and "hustle" a lot).
Thanks all guys for your input! It means a lot!
@David Sohn - thanks for mentioning my ARV article. You also gave some great advice.
@Dakoda Spencer - you are right on thinking the skill of calculating ARV is a valuable thing to learn. I think the question is just how is best to go about learning. While you would certainly learn a lot getting your appraisers license, I think a lot of the other stuff you'd have to deal with my distract from your original goal of focusing on real estate investing.
I would look for real estate agent continuing education in your area where you can go in person to classes that teach valuation of properties. They might call it "Comparative Market Analysis." A course like that would be worth your money.
Then when you get your license, you'll have to work under a broker, right? Some companies you pick will have built in education opportunities. You could try to find some about valuation. But within that brokerage, I'm sure you could ask for advice or even pay for an experienced agent's time and ask them to help you learn the skills.
And then, there's just practice, practice, practice. Read my article linked above. Read J Scott's book. And then go try to value 100 properties on your own. You're bound to get better by doing it.
Best of luck!
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