Hello BP Nation!! I have been running numbers on multiple properties around the Quad Cities area to become more efficient and comfortable with the process, as recommended on podcasts that I have listened to.
One item that I seem to struggle with is getting a solid ARV to put into the calculations. I am looking for advise on how to come up with a solid ARV for these calculations. Thanks!!
Use comps. You can get them off Zillow, Trulia, ... etc. Then you should also always get a second pair of eyes to check the numbers you came up with (let's say a real estate agent or preferably 2).
Put all of it together and if you are close by the numbers, then you are good. If there is a large difference in numbers ... then you need to re-evaluate.
If you have been doing it for the same location for some time, then you should have some of these numbers based on your experience. If you going into a completely new area, then you definitely need to start building that knowledge using the approach discussed above.
@Henri Meli. Thanks for the reply Henri. I have been using Zillow and realtor.com to try to get numbers for comps. I have a couple of friends that are realtors and I will reach out again to see what they think.
One of the things I'm seeing is that, even within a neighborhood there seem to exist "micro-community" and the comps from one to the other vary greatly. If I'm not careful the data can be misrepresentative from housing block to block. Is this normal?
The QC is difficult. Sooo many micro communities...this is something that makes investing there hard for out of state investors. Contact an investor friendly realtor to do a comp analysis on it. If you are flipping...use this agent to sell in exchange for the work it takes them to get that to you. Or, ask them to and buy them lunch monthly to continue your professional symbiotic relationship. As they get to know what it is you are looking for you will find that they will start bringing you deals from their sellers that meet what it is you are looking for. This business is 1000x more about relationships than numbers, location, or financing alone.
Meghan McCallum, thanks for the insight! I wasn't sure if what I was seeing as "micro-communities" was real or just something off base. Good advise in regards to the realtor. I've had a couple phone conversations and hope to move in that direction soon.
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