Wait - what the heck is ARV? Since, I am not the queen of acronyms and do not plan to become one, I had to ask myself the same question. But we are in luck because this one is easy! AVR stands for After Renovation Value and pretty much one of the most important facts to know about a home you are planning on restoring the love to - aka 'flipping.'
Since I am very big on the budget when it comes to starting a renovation, this little acronym pulls on my heart strings. If you do not know your ARV before you purchase a home to flip, you are putting yourself and possibly your investment partners at risk because you have no idea what your renovation budget needs to be in order to make a profit from your efforts. Turning a space into something beautiful is fun but in order to keep moving forward as an investor, one also needs to make a profit.
How do you find your ARV?
In order to calculate the after renovation value, contact your realtor to do a market analysis for the area. This will allow you to know what the homes are selling for in that area. This information will also help you with decisions for what to renovate, for example, is it beneficial to add in an egress window for an additional bedroom or would a master on suite be more beneficial.
You found out your ARV - now what?
Math. Now it is time to bring out your calculator or spreadsheet and figure out if there is enough equity, after renovations are completed, to make a profit and is that profit in favor of the time required to complete the project?
We love helping investors!
Being renovators ourselves, we crave the energy and excitement from taking house and making it a home again through the renovating processes. We love helping fellow entrepreneurs succeed through giving new life to a home while living their dreams. If you are looking to start investing in renovation projects, or have been for sometime but are missing that team by your side through the process of buyer, designing and selling - we are here to support you!
RAFTER REAL ESTATE | 701-471-6198
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