All Forum Posts by: Jason Malabute

As far as age, I have been using a multiplier if it is more than a 10-15 year difference. I usually can find houses that are built in the same timeframe, so rarely do I run numbers adjusting for age.

as far as condition, all of the houses I flip are considered a C2 for property condition rating. A C1 is brand new. C2 is renovated (being very basic here), C3 being cared for but not renovated. C4 is cared for but with some deferred maintenance. C5 is with a bit of deferred maintenance, and C6 is in poor condition. I'm not sure how universal these codes are, however I do my best to find renovated comps. If I don't, I like to make sure the comps are C3 condition. This is where there will be a buffer of sorts. If you have two similar houses one a C2 fully renovated and a C3 in very nice original shape and the price is the same... the renovated house should sell first.

Just as an FYI, this system is something I have been using since moving to NY. Back in CT where I did my flips, I actually never really did ARV comps (if you can believe it). I grew up in town and honestly had a good feel for what houses would sell for. I would confirm a sale or two in that range in the area, be a little conservative and make my offer based on that. My new market people seem to be paying significantly more for distressed houses, which has led me to come up with an ARV system I am comfortable with. Just wanted to be transparent with it.

As far as age, I have been using a multiplier if it is more than a 10-15 year difference. I usually can find houses that are built in the same timeframe, so rarely do I run numbers adjusting for age.

as far as condition, all of the houses I flip are considered a C2 for property condition rating. A C1 is brand new. C2 is renovated (being very basic here), C3 being cared for but not renovated. C4 is cared for but with some deferred maintenance. C5 is with a bit of deferred maintenance, and C6 is in poor condition. I'm not sure how universal these codes are, however I do my best to find renovated comps. If I don't, I like to make sure the comps are C3 condition. This is where there will be a buffer of sorts. If you have two similar houses one a C2 fully renovated and a C3 in very nice original shape and the price is the same... the renovated house should sell first.

Just as an FYI, this system is something I have been using since moving to NY. Back in CT where I did my flips, I actually never really did ARV comps (if you can believe it). I grew up in town and honestly had a good feel for what houses would sell for. I would confirm a sale or two in that range in the area, be a little conservative and make my offer based on that. My new market people seem to be paying significantly more for distressed houses, which has led me to come up with an ARV system I am comfortable with. Just wanted to be transparent with it.

Here's a rough example:

If you look at the difference between the improved and unimproved properties then you can determine that improvements are are roughly worth $58/sqft 

(148+140)/2-(89+83)/2 = $58/sqft

that you can go back and add to your CMA to determine your ARV.

Hey @Jason Malabute hope you're not getting swept up in the fires going on in Sunland.  

To answer your original question, what you're looking for is the value of amenities in a particular neighborhood. The best way to find those values is either to ask a local knowledgable realtor, or to extract them by doing a comparative analysis on like properties with one that doesn't have that particular feature, and the same way that you wold do a CMA.

@Jason Malabute I described above, the calculation I have seen used for lot size is $3000/acre. A 1 acre lot would be $3000 less ARV than a 2 acre, etc.

In my area improvements are listed on the Assessors site, giving the SF size.

@Jason Malabute I am in a new market, however when i bought my current house, I got a copy of the appraisal. The values he used up/down almost mirrored my last market (central CT), so I simply used what I "knew".

As far as a patio, if my house didn't have one, but a comparable house had a 200 SF one, then I would adjust by 200 SF x $10/SF or $2000. It is not by any means that this is exact, however it helps me get an idea, as well as gets me solid comparables for the day an actual appraisal happens.

Regarding living verse total SF, I feel weird saying this, but what do you mean total SF? If a house is a 1000 SF ranch with a full unfinished basement, I compare it as a 1000 SF house. If it has a 500 SF section of the basement finished, I treat that area as the appraisers did, which was a reduced $/SF amount. What other SF would be included in the total?

@Jason Malabute this is all part of the "art" of running comps and getting your ARV. Lately I have been treating them like an appraisal. I have a few appraisals in my folders and use the adjustments they used. $30/SF for main living space. $10/SF for decks/patios and basement living space. $3000/acre. I don't know that this is the best way, however I have seen it compared with realtor CMAs and my numbers are usually right where those come in. I do my best to get houses in the same area, similar style, similar age, and if possible only use renovated houses. If there is anything that's tough to adjust (exact location) i am just conservative.

@Jason Malabute this is all part of the "art" of running comps and getting your ARV. Lately I have been treating them like an appraisal. I have a few appraisals in my folders and use the adjustments they used. $30/SF for main living space. $10/SF for decks/patios and basement living space. $3000/acre. I don't know that this is the best way, however I have seen it compared with realtor CMAs and my numbers are usually right where those come in. I do my best to get houses in the same area, similar style, similar age, and if possible only use renovated houses. If there is anything that's tough to adjust (exact location) i am just conservative.