One of the most crucial activities in buying an investment property which requires rehab is to determine its actual value once the rehab is already finished. Rehab, in this context, is actually short for rehabilitation. Rehab properties refer to those that are bought for the purpose of selling them to generate profit after the completion of rehabilitation or improvements. The actual value once these improvements are already completed is called ARV which stands for After Repair Value. You need to get a clearer idea about this value if you plan on buying a rehab property and desire to apply for loan and insure the project’s profitability. If you are in California, then rest assured that there are numerous providers of California ARV rehab loans and you just have to narrow down your options so you can find one which perfectly suits your requirements.
When trying to acquire California ARV rehab loans, it is crucial for you to get a close to accurate estimate of the property’s worth once everything is already fixed. You can actually compute this worth / value by checking out the pending, active and sold comps that are close to the specific area where the property is located. Consider using comps (comparable sales) that are justly shut and those that are fully fixed up.
Another tip in getting the most suitable California ARV rehab loans for you is to determine the specific amount of work needed to fix the whole property. Seek the help of the most qualified and experienced contractor who can provide you with a reliable estimate of the needed repairs. You can present this estimated amount to your chosen rehab loan lender so he/she can start reviewing your application and making the decision. The key to achieving success in this venture is to remember that if a project requires more work, then its risks are higher when compared to the rest. If you are still starting out, consider sticking to projects that require repairs not exceeding $25,000 to $35,000. You can gradually increase this limit as soon as you become more familiar about the ins and outs of this venture.