ARV stands for after repair value, and it’s an estimate of how much a property will be worth once renovations are complete. It’s an important calculation for real estate investors who flip houses, because it gives them a good idea of whether or not a particular deal is worth their time. It can also help them determine how much to offer for a property and how much they need to spend on renovations in order to make a profit.
The first step in calculating an ARV is finding comparable sales. These are homes that are similar to the one you’re analyzing, and they have sold recently in your area. You can find these properties on the multiple listing service (MLS), or you can ask a local real estate agent for assistance. Once you’ve found some comparable sales, you can start adjusting their prices for the different features of your property. For example, if your property has a pool or a fireplace, you’ll subtract those features from the comparables’ values. You’ll then add in the value of any other major features that you plan to include in your renovations. Read more https://www.whiteacreproperties.com/
Once you have your adjusted comparable sales, it’s time to calculate the after repair value of the property. To do this, you’ll need to know the current market value of the home and how much it will cost to renovate. For this, you’ll use a real estate calculator or spreadsheet. However, it’s best to work with a professional appraiser or real estate agent who can help you make the most accurate estimate possible.
As you do this, it’s important to keep in mind that the after repair value doesn’t account for things like unexpected costs or a housing market that changes during the renovation period. This is why it’s so crucial to work with a professional, especially if you’re new to the real estate investing world.
The after repair value is also an important figure to consider when obtaining financing for a property. Many lenders will only lend 65% of the ARV, so knowing how to accurately calculate this is a crucial skill for any fix-and-flip investor. It can also help investors decide whether or not a property is worth buying and renovating, and it may help them avoid making bad investments that will result in them losing money on the deal.