When calculating the after repair value (ARV) I would only look at comps that sold within the past 6 months, no more than .5 miles away, and within 1000ft^2 of the same size. If it is in a higher end subdivision I would make sure my comps were in the same one or another that was close and similar in quality. If you have several to choose from I would try to match up ones based on proximity, rehab expense, beds/baths, garages, and lot size in that order.
In addition, there shouldn’t be any active competition cheaper in the immediate area that is comparable without a very good reason, ie: they are smaller in size, need extensive rehab, already under contract, etc.
Lastly you will want to be able to justify the days on market if the property is listed. If it has been listed for longer than 30 days you would want to a reason it wasn’t already under contract, ie; it just had a major price reduction, offer just fell through, short sale, tenant wouldn’t let buyers through the property, etc.
Remember, you are going to be showing a prospective buyer that they are going to be able to make money and be in and out in< 90 days, so be prepared with comps and be able to paint the picture that they want to see.
If it is a cash flow property for a cash flow buyer, I would make sure you have the lease agreements to send to the buyer as well.
Hope this helps,
D
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If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125
When calculating the after repair value (ARV) I would only look at comps that sold within the past 6 months, no more than .5 miles away, and within 1000ft^2 of the same size. If it is in a higher end subdivision I would make sure my comps were in the same one or another that was close and similar in quality. If you have several to choose from I would try to match up ones based on proximity, rehab expense, beds/baths, garages, and lot size in that order.
In addition, there shouldn’t be any active competition cheaper in the immediate area that is comparable without a very good reason, ie: they are smaller in size, need extensive rehab, already under contract, etc.
Lastly you will want to be able to justify the days on market if the property is listed. If it has been listed for longer than 30 days you would want to a reason it wasn’t already under contract, ie; it just had a major price reduction, offer just fell through, short sale, tenant wouldn’t let buyers through the property, etc.
Remember, you are going to be showing a prospective buyer that they are going to be able to make money and be in and out in< 90 days, so be prepared with comps and be able to paint the picture that they want to see.
If it is a cash flow property for a cash flow buyer, I would make sure you have the lease agreements to send to the buyer as well.
Hope this helps,
D
__________________
If you would like the chance to work with me or one of my fellow real estate investor coaches and our advanced training programs, give us a call anytime to see if Dean's Real Estate Success Academy and our customized curriculum is a fit for you. Call us at 1-877-219-1474 ext. 125