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Rehabbing & House Flipping

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Eric M.
  • Flipper/Rehabber
  • Louisville, KY
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How accurate do you think your ARV's are?

Eric M.
  • Flipper/Rehabber
  • Louisville, KY
Posted Aug 28 2019, 22:17

Typically, by the time my flips are on the market, I am completely over it and ready to move on to whatever is next, so I never did much retrospective analysis. I know how much I made and generally what went wrong and right, but not much other number crunching the way I do with my other businesses.

Recently, I went back over several years and did a deep dive analysis of my flips, flips I have just invested in and other ones I have been involved with. 

One thing kind of surprised me.

Basically, if you had asked me (going into the flip) my confidence level on a scale of 1-10 in the accuracy of my rehab cost and ARV, it generally would have been 6-7 for rehab cost and 9 in my ARV. I tend go in very uncertain if I have rehab costs right and wondering what might go wrong, but pretty certain I have ARV close. The reality was the opposite.

I was really accurate with my rehab costs despite the things that go wrong, but not as accurate as I expected with my ARV. In other words, my risk wasn't where I thought it was.

Which one do you think you are more accurate on and how accurate do you think it is reasonable for ARV to be on a mid-level, 6 month close-to-close flip. It may be that my expectations for how accurate I should be is unreasonable, but accurate ARV's have to be one of the keys to these iBuyer flippers that we have to compete with. Since I have recently gotten access to more data with my RE license, I have gotten kind of obsessive about fine tuning my ARV's lately. I live here AND I have the data, I should be able to be more accurate than the iBuyers.

Adjusting for changes you make along the way to your rehab plan, do you think you can be accurate to within a 5% window (10K window on a 200K house)...a 10% window?...more?  Over a 6 month period.

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