Hitting your target ARV

[Bhanu Kuna]

Hi Everyone!

I recently acquired a property in West Philly for 85k. Recent sales of renovated properties are about 175k. Any tips and tricks for ensuring you hit your target ARV?

Thanks.

[Damaso Bautista]

Although I don't think there is a specific formula. I think a good way to come close is to do comps in the area that your home is in. The more the better and the similar the better. Then undervalue the ARV that you came up with. Just assume that your ARV will be lower. I find that if you lower your ARV comp and over estimate the all in budget for the project (acquisition costs, holding costs, repair costs) then you can have a very real picture of the deal. This can also help you in deciding whether it is worth it or not.

I see alot of people trying to do projects on razor thin margins and I feel that is a recipe for disaster.