CHAPTER 6 Making Money on Flipped Houses Determining whether a property will make a good flip depends largely on figuring out the After Repair Value (ARV) . What is the ARV and how do you find it? In my opinion, the after repair value is what the subject property will be worth AFTER all repairs are made to the home. To find this number, we must figure out what the CURRENT value of the house is, in its CURRENT condition. REMEMBER: The asking price does not determine the homes current value. A seller can ask WHATEVER they want for the property...it doesn't always mean they have justified that number based off of its actual current condition and value. First, we must determine what the After Repair Value would be in order to determine what the current value of the home is. The renovation value is a little trickier to manage, although the more properties you flip, the better handle you will have on these numbers. Particularly when you’re new, a real estate agent, appraiser, or contractor can help you get more accurate numbers. I would highly suggest to get the help of at least 1 or all of the above to determine the ARV of the property you are interested in flipping. A good ARV involves looking at comparable properties (or comps) near the property you’re considering flipping. While you can do this on your own, an agent, such as myself, can also help with this. A seasoned Realtor® should be able to put together a Comparative (or Competitive ) Market Analysis (CMA) that will 51
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