By Kim Parmon, August 9, 2019
You’re looking at buying a house to flip. You find one that looks like a great deal. How can you be sure? Checking ARV is a key step. After Repair Value, or ARV, is a phrase that flippers throw around a lot. So what does it really mean?
Put in the simplest possible terms: ARV is someone’s best guess at what a house will be worth when it’s pretty again. “Pretty” is a pretty general term here. Maybe it doesn’t need to be beautified as much as it needs to be made more functional. Maybe there needs to be a bathroom added, or the tiny kitchen needs to be expanded. It could be that the head height on the staircase is the big issue here preventing the house from being worth it’s maximum value. Whatever it is, step one in investing is to formulate your plan to fix the property you’re looking at.
Once you have your plan in place it’s time to determine your ARV. Maybe you’re taking a dated two bed, one bath bungalow and expanding into the unfinished attic space. The attic will become a beautiful master suite. So when you look at comparable sales in the neighborhood you aren’t looking at two bed, one bath homes. You’re looking at beautifully updated three bed, two bath homes. What did those sell for? That’s your ARV.
I will say, there’s a bit of an art to this type of comping. It’s not nearly as straightforward as comparing a finished home to the surrounding sales in the current market. What happens if the market changes? What happens if the repairs done don’t match the comps? An ARV is really an educated guess about the possible value of a house.
There are a lot of intangibles to this! Check to make sure the streets are similar. Are the trees on your street as pretty? Is the view as good? Can a dog run around in the backyard or is it all hillside? Can you have a great dinner party in the dining room or does it only fit a four person table? Is the master closet going to fit all of those hats? Put yourself in the shoes of your buyer. Will they be as happy with your product as they would be with that comparable sale? If the answer is no you’ll want to reduce your ARV to compensate.
One of the biggest mistakes I see flippers make is assuming an ARV that’s too high. It’s great to have a positive outlook but protect yourself by investing wisely and making sure your ARV is right on the money!
Happy flipping!
Kim Parmon
Principal Broker | Earth Advantage Certified | OR
She/Her
Kim Parmon
Principal Broker
Lead Listing Agent
Earth Advantage Certified | OR
kim@livingroomre.com
Oregon is the fifth state that Kim has called home in her life, and this one is sticking! After moving multiple times in her childhood, Kim fully understands how empowering homeownership and having roots is. She loves waking up every day in this beautiful place and wants everyone to experience what it feels like to live in their dream home.
As a kid, Kim spent her free time wandering through open houses and exploring construction sites for the fun of it. After careers in the professional ballroom dance world, the entertainment industry, and the service industry, Kim stumbled into real estate as both a passion and a profession through the purchase of her first bungalow. After renovating it with her husband and selling it for enough of a profit to pay off their debt as well as buy a new house to live in, everything clicked: she decided to get her real estate license and help her community experience the emotional and financial benefits of homeownership.
Kim put down roots in Portland in 2015 and has cultivated a referrals-based business throughout the years. She understands that real estate is a service and the experience she gives her clients is first-rate. She works hard to anticipate needs. She is responsive, thorough, empathic, and a skilled negotiator who enjoys market analytics and strategy as much as she enjoys connecting with her clients. Her ethics and reputation are the cornerstones of her business and the happiness of her clients is the yardstick that she measures success against.
Kim merged her business with the best agents in Portland at the beginning of 2022, which has allowed her to give her clients more resources, more advocacy, and a top-notch real estate experience. She is honored to be a part of her incredible team and feels lucky to go to work every day.
In her free time, you'll find Kim enjoying lazy evenings by the fire with her husband, daughter, and rescue dogs. She loves dancing, live music, exploring all of the beautiful places around us in the PNW, enjoying a cider and a good meal with friends, and browsing Powell's for a great new book.
Andee Ziegler
Licensed Listing Team Operations Manager
andee@livingroomre.com
Loving where you live will change your life. Everyone deserves that joy. For me, real estate has been a way of nurturing my community and doing what I can to help people find stability, grow generational wealth, and create a little space of their own in the world.
For 15 years I found the most joy in helping first-time homebuyers, guiding my peers through their first major investment and dreaming up what home means for them. I’ve done restoration work on homes from a variety of eras, 1894 Victorian farmhouse to classic 1950’s ranch. I enjoy empowering new homeowners with the knowledge I’ve garnered over the years, from systems to finishes.
In 2022 I joined forces with some of the best realtors in the biz and shifted my focus to operation management for listings. This welcome change opened up space in my life: more cake, less pants.
Andee Zeigler | Licensed Listing Team Operations Manager | andee@livingroomre.com
Jessica LeDoux | Lead Buyer Agent | Broker Licensed in Oregon | jessica@livingroomre.com
Karim Alaeddine | Operations | Principal Broker Licensed in Oregon | karim@livingroomre.com
Jenessa VanZutphen | Buyer Operations Manager | Licensed in Oregon | jenessa@livingroomre.com
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