Calculating Property ARV

[Cody Cavenaugh]

Hi, I'm a new wholesaler and want to learn how to calculate ARV and learn how to value homes. Can somebody help explain how to learn my market, repair costs and how to properly value a home? This is my biggest thing I'm currently struggling with via wholesaling. Thanks

[Jerryll Noorden]

Quote from @Mason Hickman:

@Cody Cavenaugh

To get the ARV, essentially you are just running a comparative market assessment (CMA) for the property after the property has been renovated. You can probably google and get a bunch of results for "how to do a CMA" but essentially you should find properties in the same area with the same property characteristics that have recently sold and use these to create an estimate of what your property will be worth after renovation. Access to the MLS makes this quite simple.

 To add to his brilliant answer...

you can also use zillow trulia realtor.com to see recently sold houses with location time on market # of views to get a more accurate ARV. Note that the ARV needs to be adjusted based on those metrics. This is a step most people skip.

then the Cost Of Repairs you get by evaluating how much things cost to repair. Homeadvisor.com can be quite helpful with this. 

that site will tell you what any repairs cost and how much people in that area have paid for those exact repairs. So you can very accurately estimate the cost of repairs.

as you do this for a while you will become quite good and fast at this

now you didn't ask about the following but this is one of the most important things you need to know trying to get an accurate cost of repairs.

you need to understand what needs to be repaired and what does NOT need to be repaired.

ARV and COR (Cost Of Repairs) go hand in hand. One doesn't work without the other.

don't over-repair or upgrade. This is advice I myself don't follow, mind you. We repair and fix EVERYTHING... but we are an exception. Our strategy is different than most.