Easiest Way to determine ARV?

Question

Hello everyone. I started to try and evaluate properties I found on Zillow today. I put information into the BRRRR calculator and didn't necessarily know how to calculate the ARV without an actual comp number on Zillow. I was wondering, other than contacting an agent, what is the quickest way to determine ARV in relation to comps? What sites/areas can you find the most accurate comps for an ARV calculation. Thanks!

Francis Louis Vogel Jr · Answer

Michael,

After repair value [ARV] is a proforma [future] value number this is typically comparable sales within 180 days. My firm works with commercial real estate investors for financing based in part on ARV.

Here's an example of how a underwriter views ARV.

1] Sales comps and days on market

2] Avoids outliers "city border lines" for example

3] Area vacancy rate

4] Crime index

5] Cost of repairs vs. ARV

6] Loan to cost [LTC]

Great post, good luck.

Chris Levarek · Answer

@Michael Mackney Yes you can do this. You can even hire an appraiser on your own to get a feel for the ARV. $500-$1000 bucks to save you some time down the road can be useful. If you are doing the appraisal through the lender, you might be more inclined to just take the deal :)

But yes, you can always get a 2nd appraisal.

Michael Mackney · Answer

@Chris Levarek in that case, can you ask for a second appraiser to take a look at the property or does it go by what the initial one appraised it at?

Michael Mackney · Answer

@Tim Delaney thanks! That seems to be the main source of comps that I have seen so far when researching it

Chris Levarek · Answer

@Michael Mackney Definitely an art to determining the ARV. Using recently sold properties or speaking with a good broker/agent in the area will be helpful. In truth, the ARV is at the mercy of the appraiser. We've had very similar properties a mile from each other vary in ARV by upwards of 30-40k. Exact same sq footage, layout, etc. The difference? Different appraiser.

However, the more data you get and more experience in the market, the easier you will be able to determine an more accurate ARV. Leaning on experts in the area will your best bet starting out.

Tim Delaney · Answer

I usually contact my agent. That is the best source for getting the most recent comps. Even if you don't want to ask your agent for their opinion on ARV, you can at least ask her/him to pull a list of recently sold, under contract, and active listing comps for you to do your own analysis.

You can always use the recently sold filter on Zillow, but those aren't as accurate.