How to calculate ARV with no comps?

Question

I am doing some research (trying to) on a few properties in a rural area. They appear to need a full rehab, but I don't know how to come up with the ARV. There are no recent comps and the houses nearby vary widely in sizes and prices. The price ranges of the other houses are about 100k to 300k! So I don't have a clue as I am still a newbie and learning.

Also, are rural areas highly sought after? The area is beautiful and I rarely see houses for sale. So I just figured the few properties I came across would sell fast when fixed up.

Gary L Wallman · Answer

It is fairly difficult to come up with comps in areas with little turnover. Typically you should use the closest comps to your property and adjust up or down for things like square footage, number of bedrooms and bathrooms. Be sure to look at lot size carefully as some rural properties can sit on large acreage which will effect the price greatly. This is not as big as a factor in typical subdivisions.

I have found rural areas difficult to flip in. Sporadic demand can be a huge problem if your sitting on a hard money loan for months waiting for the right buyer. Give me a desirable, thriving, suburban area with great schools every time.

I have found rural areas difficult to flip in.  Sporadic demand can be a huge problem if your sitting on a hard money loan for months waiting for the right buyer.  Give me a desirable, thriving, suburban area with great schools every time.

Kenneth Garrett · Answer

@Carmen Lewis

I agree with @Gary L Wallman flipping in rural areas with no sale comps indicates long market time.  Stick to city urban areas and suburbs.  Look at days on market and comparable sales for good analytics.  When flipping you want to appeal to the majority of the buyers.  Simple quick fixes and move onto the next one.  I understand the city and suburb markets have more competition, but they also have more buyers.  Pick good safe neighborhoods with highly rated schools.

Good Luck.

Ronald Miller · Answer

You may be able to get a rough estimate by breaking it down as price per square foot, in comparison to the varied comps of the area.

...just an idea. I am new to all of this and will start with wholesales.

Best of luck to all!

Carmen Lewis · Answer

Thanks @Gary L Wallman for the insight. I think I will focus my efforts on my suburban leads for now!

How to calculate ARV with no comps?

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