Calculating ARV

[Nick Deshotels]

BP Nation, I'm looking for a little input on calculating ARV. Is it a good idea to take the lowest, middle, and highest comp by square footage and apply that average to the seller's square footage? Are there any glaring holes with this method? Thanks

[Crystal Smith]

@Nick Deshotels For our own deals & those we work on w/ other investors, when we're evaluating SFRs ARV, we exclude properties that have >20% larger square footage from the calculation. We'll also exclude properties that are 20% smaller. We'll include 20% smaller if we can't find enough properties for a good analysis. Once we do that we don't make any adjustments to the ARV, we use the actual values to calculate the average. Some folks use +/- 10%. The premise for not making any additional adjustments is it gets us quickly in the ballpark.