How to estimate ARV in my next flip

Question

I am in the process of purchasing a flip located in 2426 10th st S, St Petersburg,Fl. I’m trying to estimate the ARV but the comps are not clear to me. I tried finding comps in the area for 3/1 1098 sqft but most of them are 3/2’s. Can anyone give me a idea of what the ARV would be?

Gretchen Guarino · Answer

Hi Frankie, I am a realtor in NY State and also have access to private lenders who fund fix and flip projects. An experienced realtor should be able to run a comparative market analysis for the ARV. Most realtors will do a free, no obligation market analysis (hoping to get the listing when you are ready to sell it!).

Jonathan Greene · Answer

Are you licensed? Where are you getting your comps? From a website or from an agent? If you have access to the MLS, there will be comps. And wouldn't you be trying to add a full bath to a 3/1 on a flip in St. Pete anyway?

Evan Polaski · Answer

@Frankie Perez, or you could get a BPO, retain a real estate agent, call in a favor from an appraiser.

The thing with all of this is there will never be a true comp, particularly in older neighborhoods where each property is unique.  Even if there was another 3/1 around 1100 sq ft, is it renovated, is it a ranch or two story, is some of the finished sq ft in a basement, is there a garage, how big is the yard, is yours on a busier street...?  All of these effect value, so it is not as simple as finding an identical comp.

As Bob mentions, there is countless material available to help, but I would include this forum as well.  Are there 2/1s in the area?  Are there 3/1s that are markedly bigger or smaller?  Are there outdated 3/1s that you can use? If so, use those and then look at 3/2s updated vs outdated to see what type of premium an updated property is typically getting and apply that general premium to the outdated 3/1 comps.

Bob Okenwa · Answer

@Frankie Perez

Running comps isn't all that difficult. It's not always easy, but it can be done by just about anyone. You just need some practice. You should Google/YouTube "How to find real estate comps" and go from there. Take a day or so reading/watching and you'll have a good idea on how to run comps.