All Forum Posts by: Matthew Lahickey

@Aaron Montague 5+ units

Great, thank you for the information! You really help clarify would I thought was the correct way. I appreciate your time!

@Jason Stubblefield, thanks for the advice!

Thank you for all the replies. Just to clarify I am looking to BRRRR the property.

@Michael Ealy, I am basing my arv on a conservative 78k annual gross with 50% expenses with increases in rents due to modest improvements. 

Thanks for your reply and the example.

@Immanuel Sibero, thank you for the reply. I’m looking at commercial, 5 units and above. I. This example I found a property listed at a selling price for $383k. Gross income is $64200 but expenses are only $19788. Cap is 11.6. Now if the expenses are true it would be valued at $383k, however in my equations if the expenses were 50% the house would be $249.

Hence why I’m asking about Arv. It could be two drastically different figures. This particular home is renting at an average of 890 with average rents in a 5 mile radius of 1150.

Hello,

As I am researching multifamilies I am finding most sellers seem to understate their expenses in order to elevate their properties value. When determining an accurate ARV do lenders appraise based off the 50% rule or the actual expenses paid in the prior year, IE: tax returns?

Thanks.

Hello All,

I am looking to find my first BRRRR property and will be using Hard Money. I am trying to determine my current buy price based on my ARV. I'm a newbie and need some clarification: is the ARV calculated with actual expenses from prior 12 months or is it a predetermined formula such as the 50/50 that underwriter's use?

I may be overthinking this but I believe the 50/50 is just a quick generalization and the actuals will be more consistent with the ARV. I am actively searching deals and I am finding many properties have understated expenses. At most I have seen 30% in a C multifamily market in CT.

I understand the cap rate and the NOI determine the ARV, however, I am learning it's easy to manipulate numbers to make a property appear to be a better deal. Can someone please clarify the ARV and if I should base my ARV off 50/50 or actuals listed on MLS.

Thanks,

Matt.