Los Angeles ARV Battle - Who is closer?

Question

Hello BiggerPockets Rehabbers and Wholesalers,

A partner and I are arguing over what the ARV should be for a potential rehab deal we have under contract for $370K in Los Angeles. I think we need to be buying at $300K with $35K in repairs, that will give us 10% ROI and 20% COC. The ARV I was able to come up with was $417K but came up to $425K Max. He says he knows the area better than anyone and the ARV is $490K+++ all day, that it's on a corner lot and in a hot pocket right now.

Property Address:

2202 W 77th St. Inglewood, CA 90305

My lender loans 76% of purchase at 2pts and 12% interest.

Buying, holding and sales cost are around $35K.

Geni P. · Answer

He is a contractor and does want to add a master bath but that was included in his $35k budget.

Clarence Johnson · Answer

I know the area well, ARV def isn't $490k....don't base numbers on speculation, only sold comps....within the last 45 days I closed a new rehabbed 3/2 for like $430k...

Ewa Reza · Answer

I think you're more realistic than your partner. No way that with $35K rehab you'll be able to sell it for $490K. Even if your partner is a contractor it would be very hard. Looks like this place needs addition or at the very least reconfiguring of the layout to add 2nd bathroom.

Geni P. · Answer

Comp filters:

Closed Sales ONLY

Within 0.5 miles of subject

0-90 days from sale date of comp

+/-10% sqft (15%max)

ARV=3.25% higher than the second highest comp

Geni P. · Answer

I just did the math with his ARV and the numbers still don't work. We'd have to reach a resale of at least $512K to get our minimum 10% ROI and 20% COC......