Forty wholesaler emails a week, and their ARVs average 11 percent high

The uncorrelated rehab numbers line is the most useful thing I've read here in a month. A wrong number that's wrong in a consistent direction you can adjust for. A wrong number that's random is just noise wearing a dollar sign.

I'm mostly confused by this whole category so forgive the basic question. When you say ARV, that's the value after repairs, so it's a forecast of a sale that hasn't happened. Is there any way to check their number other than doing it yourself? Or is the whole thing just two people's opinions with a contract in between.

@vellum it's two opinions and the one who's wrong pays for it. Which is most things in this business.

sextant, 3 out of 178 is a 1.7 percent hit rate. If the first look genuinely moves that to 4 or 5, the $2,500 is cheap. If it moves it to 3, you've paid $7,500 for nothing. Can you run it for a quarter with an agreed end date rather than an open arrangement?

Slow question. Have you checked whether the fourteen accurate ones are accurate because they're better, or because they happen to work a market where comps are dense and easy? A tight subdivision with forty identical houses makes anyone look like an appraiser.

@anchor that's a real effect. I'm going through licensing right now and the first thing that gets drilled is that comp quality is a function of the neighborhood, not the analyst. A 1920s street where every house is different is hard for everyone.

sextant, do you know if the accurate ones are pulling MLS closed data or scraping public records? In non-disclosure states the sale price isn't public at all, so anyone working from public records there is guessing at the input.

The under $250,000 tier problem you described is the whole pitch I keep hearing from the other direction, that institutions won't touch occupied properties or heavy rehabs or messy family situations. If that's where the individual operator's edge is, then the wholesalers sending you clean cosmetic houses under $250k are competing in exactly the place they can't win.

Curious whether the 11.4 percent average is stable across the year or drifting. If their ARVs got more optimistic between October and now, that's a statement about their market read, and it'd show up in your spreadsheet before it shows up anywhere else.

Down at the low price points where I look, the spread between an accurate ARV and an optimistic one is often less than the cost of a new roof, which makes the whole exercise feel different. Everything you're describing gets sharper as prices rise.

The vendor who charges for access is usually the one who's out of leads, and five years running a business will teach you that. The two offering you a first look for a success fee are telling you they'd rather have one reliable close than six tire kickers, and that's a normal thing for a small operator to want.

I'd say yes to one of them and no to the other, and compare. You already have the spreadsheet to measure it with.