ARV and how to calculate it

Rehabbing, Fix and Flip, Rental Properties
1

Ok guys I have located my first possable deal and I am trying to find a way to calculate the after repair value…I have a realitor working on the comps and I meet with him on monday @2pm…asking price is 131,800 3br 1 1/2 bath ca/ch and the seller agent said they were negotiable (the owner had died) as for repairs the yard needs to be cleaned and trees need to be trimed, the living room needs carpet, and all 3 bedrooms need carpet…needs a new counter top stove and they are currently painting the inside of the house they should be done painting by monday. the home also needs a new front door and needs all new doors inside the only other thing is a garage door opener (2 car garage) I have figured the total repairs to be about 5k, but I have no clue how this will affect the ARV or how to calculate the ARV to see if I should fix and flipp or hold for rental income if purchased with an I/O loan and held for rental income the property would cash flow 91 month but if I can by and flip and make a quick 5k after all expense relitor and all i will be happy with my first deal
(I think the repairs that need to be done can be done in about 7 days or less if i hit it hard)

2

It doesn’t. The ARV should be calculated strictly off of comps. It should have nothing to do with what you are paying for the house or how much money you have put into rehab. You should actually work backwards to find your maximum offer price. ARV minus rehab costs minus holding costs minus selling costs minus desired profit = your maximum offer price.

Shoot me a PM if you’d like me to send you the Excel spreadsheet that I made for this.

3

Could I get you to send me that spreadsheet as well TravisTX. My e-mail is justinkerstetter@earthlink.net. Thanks a lot.

4

I’ve received a number of requests for my spreadsheet, so I’ll just go ahead and put it on a web server for anybody who wants it.

http://d969091.u54.securedc.com/misc/RehabAnalysis.xls

If it doesn’t seem to be working properly, you may need to enable Iteration in Excel. Click on Tools then Options, then on the Calculation tab place a checkmark next to Iteration. Also if you want to check out how the formulas are working, you will need to unprotect the worksheet, which is also under the Tools menu.

Enjoy, and let me know if you find any problems with it.

5

TravisTX-

Thanks a lot. It seems to be working fine.