What does 70-80% of ARV mean?

What does 70-80% of ARV mean?

So here’s an example of an actual eXp CLOSED transaction: Property listed in the MLS at $300,000 - After Repair Value (ARV) of the property (once totally rehabbed and pristine) is $415,000 - this also represents the top sold comparable in the neighborhood.  Generally speaking, the iBuyer offer would be approximately $290,000 which is 70% of After Repair Value (AFV). There is only a $10K gap between the offer price and list price. This example would be a great candidate for an iBuyer Offer and a SOLD transaction.  THIS S A GENERALIZATION AND BASED ON ONE SPECIFIC IBUYER MODEL.

Pro Tip:

In 102, Terri shares a formula to calculate whether a property would be a good fit for a fix & flip iBuyer. That equation was based on an actual closed transaction.

However, some of you have experienced offers lower than what you expected based on that calculation. Here is another way you should consider the math to arrive at a RANGE. I think this may help level the expectations when submitting to a fix and flippers. Remember, every investor will use a slightly different strategy when making offers.


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