http://blog.mypocketdeals.com/2002http://www.mypocketdeals.com/http://www.mypocketdeals.com/theme/standard/logo.jpghttp://blog.mypocketdeals.com/2002http://blog.mypocketdeals.com/detail/id/56/understanding_after_repair_value_arv.html2010-02-24 05:39:26In todays real estate market property investors look at specific ARV as the end-goal that their investment property must reach However in the last few years it seems that this ARV goal post was in constant movement How do you reach a goal when they keep moving the goal posts2008 and 2009 were frustrating years As market values started to slide the ARV that youve determined today would not hold by the time you acquire your property and had it rehabbed That 120000 ARV that youve correctly determined in December was no longer valid according to the bank by the following March In a matter of 2 to 3 months when it was time to refinance or sell your property the bank has determined that your ARV was actually now around 108000 a nice 10 drop A constant frustrationWhat is ARV Well its exactly what After Repair Value means the value of your property after its been rehabbed and ready to be flipped or rented Thats the number that will determine your return on investment of course assuming that your other costs have been accurateOn our websites list of available properties in the information area for each property we wholesale to investors we use the lowest priced comparable sale comp out of at least three sold properties We might even go a few thousand dollars under that just to be on the safe side and to show a conservative monthly cash flow or net profitOften we receive questions from investors that they have looked on various online real estate websites such as Trulia Homegain or Zillow and the value of the home we have is either too high or too low Why they askWell it doesnt matter what ARV Trulia states or Homegain or Zillow or willow or schmillow What matters is WHAT DOES THE BANK SAY THE ARV IS And what the banks appraisers use to arrive at that number are comparable sales from the Multiple Listing Service MLS that can be provided by any licensed real estate agent True online websites can get you close but the banks ARV comes from compsThe comp parameters for Philadelphia investment property is at least three 3 sales of similar property as the subject home bedrooms sq ft etc within the past 6 months within 3 of a mile of the subject property If they cant find 3 sales then the parameters are expanded incrementally For the Philadelphia suburbs a greater distance parameter can be usedInvestors best bet is do your due diligence and look at your investment property as the bank would