I have a property that I am interested in getting under contract in order to wholesale. It is a three story home that the owner has completely gutted out in hopes of making it a multifamily home. He wasn't able to continue with the project and is very motivated to sell. It is in a really good location. Near and across the street from shops and stores. And on a main thoroughfare. Very high walkability. I think this would be an ideal rental property for an investor. Rental comps range from 850 to 1100. However, I had a contractor look at it and it will need at least 30,000 in repairs.
I am having an issue recognize what would be a good ARV. The comps in the area (within a mile) range from 18,000 to 123,200. With those, I came up with 99850. Does that seem reasonable? I figured a MAO to be 39, 895, which I think is way too high given the condition of the property. Am I on the right track? I will of course do a more detail analysis.
That big of a range of comps means at least some of those are not good comps. Good comps are houses of exactly the same style, size and condition, in the same neighborhood (not just close), and with the same defects (busy street) or pluses. Any comps that are less than perfect must be adjusted. An appraiser will start with a pretty good comp, then add to that comp's sales price if the subject property (your property) is better. And subtract for things where the subject is worse. Then these adjusted values are considered to come up with a value for the subject. Without much more detail for your comps and adjustments its impossible to say if you've come up with a good value or not.
This helps a lot. I believe I have been as thorough as I can. I have looked at the same style, house, same size house and same condition while going over my numbers. My range represents these parameters.
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