Do Not Be Conservative with Your ARV!

Transactional real estate engineers must never be conservative with their ARV. What is ARV? ARV stands for “after repaired value.” It means the potential value of a property and not the value as-is. It is determined by referencing nearby comps in a similar condition that have recently sold. If your ARV is too conservative, you will lack a margin to make a profit.

In this episode, learn about ARVs, what we look at when doing comps, and how to find comps in the boonies. Discover how to approach a seller when they ask for 20% down for a $30k house that needs work or sellers asking way over market value. Gain skills to follow up with incoming leads. Learn when you should get the authorization of release information in a subject-to.

Listen to a client’s bread-and-butter deal, and the attitude investors should have when talking to sellers about the first three mortgage payments.

Mentioned Resources:

• Zillow
• Propstream
• Realtor
• Real Estate ABC
• CallRail

In this episode we covered:

• 00:00:00 – Start-up and market update
• 00:03:32 – When to get the authorization of release information in a subject-to
• 00:04:36 – About a seller asking for $7000k down for a $30k house that needs work
• 00:13:01 – How to handle a deal with a big cash flow, nothing down, but seller is asking over market value
• 00:20:10 – What we are trying to find with the ARV, what we look at when doing comps, and reason for a high difference in comps
• 00:25:43 – How to approach a seller willing to do terms with a 20% down and when to start talking about terms with seller
• 00:29:46 – How to approach a seller that is willing to sell for what they owe, nothing down, and with a tenant in paying $600 rent when comps are $900 a month
• 00:33:51 – About a seller who owes $350 for a couple of acres; three plots are going to be sold separately from another plot that has a 4-bed 4-bath home, two apartments, a shop, and a pool on it. Asking $180 cash to buy a condo
• 00:37:15 – How to approach a motivated seller and go ahead with the deal when it is difficult to find out the property’s address to know it’s value
• 00:44:21 – Recommended application to use for sellers to call and call not go directly to private phone
• 00:44:55 – How to find comps in the boonies, what to do when it is difficult finding pictures, and how to approach a seller open to terms but numbers are high with a house that needs work and has tenants living in it
• 00:52:35 – Recommended process to follow up leads
• 00:53:26 – About a client’s bread-and-butter deal and about the attitude one should have to approach sellers when talking about the first three mortgage payments
• 01:00:50 – Wrap-up

About Blair:

Blair is the founder and creator of Dealbot, a motivated seller lead generation company. He has managed nearly $2mm in marketing spend and generated over 100,000 motivated seller leads. He also buys and sells houses himself in the Winston-Salem and Charlotte, NC markets. In the past year, he has acquired nearly $3mm in cash flowing rental properties with zero money out of his pocket.

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