learning how to be accurate on ARV (after repair value)
Hi, complete newbie here ... what are some good resources for one to learn how to accurately determine the ARV of a home? I read the document at this link:
https://www.biggerpockets.com/files/user/JasonScot...
But even in the document's example, a lot of assumptions were made. How would one learn to hone their skills on making said assumptions?
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@Kai Wong The guidelines you are asking for, to my knowledge anyway, don't exist and could not exist because it depends on the local neighborhood how much you should anticipate to change for a specific feature.
Additionally, this is investment and with investment there comes risk. We can make intelligent ARV estimates, which simply turn out not to be accurate due to changes in buyer preference or market demand. You mitigate your risk by having spread in your deal. For example, you have an ROI goal or use a 70% rule that based on all your estimates gives you X% of profit. If it sells for less than you expected, you should still have a reasonable profit.
I don't even really come up with a "hard ARV" unless there is very clear evidence. Normally, I create a range from high to low ARV and consider each potential scenario before closing.
Also consider: while I appreciate you putting thought into this as I have spent many hours analyzing props, the biggest challenge (at least in South Florida, could be different elsewhere) is finding, financing, and executing, not calculating the ARV.