ARVs for Single- and Multi-Unit Homes

4 Replies

I couldn’t find a direct answer to my question on the forums, so I’m hoping to gain some perspective here from other investors and agents  

I’ll regularly receive emails from wholesalers and my meetup lists advertising “value add” multi-family homes in Baltimore (specifically, single-family homes that have, in some way, been converted to 2+ unit dwellings). They will usually include a set of ARVs for recently sold, remodeled homes. Some of them may have been sold as a single family (1-unit), in which case I’m assuming that is what the ARVs is based off of. In that case, can one assume ARVs between will be the same? 

Thanks, 

Keenan

Great question, and in my opinion the answer is Absolutely NOT. This shows the ignorance (or deceitfulness) of many "investors" in our area who have taken a "get rich in real estate with non of your own money" course but don't have a true mentor. Valuation methods are completely different for single family homes then they are for multi-unit cash flow properties. Only use 2-4 unit comps to estimate ARV on 2-4 unit buildings.

@Keenan Rusk I agree with Joe. You can't equate SFH prices with Muti family.

The first thing, don't trust their ARV's anyway.

Do your own research, most of the the time their comps are not relevant.

The second, SFH ARV is different than MFH, so they should not be giving you those numbers to compare.

Thank you for the feedback! @Ned Carey @Joe Norman  


@Ozzy Sirimsi  I agree. My research has always led me to find proper valuations for single-unit homes. I suspected the valuations provided were not appropriate but at the same I didn't want to believe that investors would deceitfully (or ignorantly) include them in the listings as golden. *shrug*

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