From the course: Real Estate Analytics

Figuring out your ARV at purchase date vs. list date

From the course: Real Estate Analytics

Start my 1-month free trial Buy for my team

Figuring out your ARV at purchase date vs. list date

“

- [Instructor] You want to bounce off the After Repaired Value from when you bought it versus what you listed it for. So when you bought the property, two, three, four, six months ago, you had an ARV and that was whatever, 200,000, then when you went to list the property, you actually ended up listing it for 195,000. Well, okay, that's a $5,000 difference. I mean, that's a, could be a significant chunk of the profit of that deal. Why was that? Was it because I missed the mark on the ARV? Was it because the market changed? Was it because a certain time of year? And now you start to have a number and a metric that you can say, in this month, or in this quarter, or in this season, I'm seeing historically that I have to list properties a little bit lower than what the initial ARV was because of timing, or I can list them higher. Okay, typically speaking in the spring and summer months, you'll see a growth of offers or properties selling faster for a little bit more, and then as you get into winter months, it changes and slows down from there, but that happens, but you don't want to just know that it happens, you want to know when it happens, how much, and how you can use it in your business. So if you know that you're going to be buying a property that sells in a slower time of the market, then you can adjust your ARV accordingly, but not just haphazardly or shooting from the hip, you can actually adjust that based off of actual data in your business. That's what this is all about. It's not just saying, okay, well, houses sell slower in the winter time, or they take longer to sell. Well, yes and no, I see houses sometimes selling faster with the right house because people want to get in before the end of the year, they want to celebrate the holidays there, they set a goal for that year of being into a new house, okay, or you may see the opposite in your area, but the point is, you want to know, you don't want to just be guessing.

Contents