Privy's deal-finding algorithm is eliminating 90% + of all the listings available that have zero supporting data that it's a possible deal and warrants a closer look. This saves you huge amounts of time by not having to run comps on dozens of properties that have no chance of being a deal! The search filter compares the asking price of a home to the price of the comparables. If the margin between those two prices meets or exceeds the margin you set in your deal-finding filter, we will "flag" it as a possible deal. Meaning, the property shows up in the results of the search on the left-hand side of the page. If the search has already been saved, then Privy will send you an alert to your email.
So what does this mean?
If you created a search for properties that are "better" than 60% of ARV then houses with a possible %ARV between 0-60% will be displayed as a match. In the video below, a deal search set to 75% of ARV found a house that was listed for $115,000. Here's the way the math works. $115,000 / .75 = $153,333 - This number is the "Minimum Price Threshold" The house was flagged as a possible deal because it has comparables that have prices over the minimum price threshold of $153,333. (This is unique for every property) if there were no properties with prices over $153,333 then Privy would not have shown the home as a possible deal. This house has several comps over that price. If you look at a property and you don't see a way to "add value" then you can hide the property.
What are some reasons why comps may be higher than your renovated home?
It has additional qualitative value. Meaning it's not about the numbers. These are things like the comp backs to a river, it's on a park, it has a view, it's oceanside, it's on the other side of a major highway.
Your house is on a major road. This can lower the potential ARV by 10% or more.
The comp has additional bedrooms or bathrooms that need to be accounted for.
The comp has a much newer year of construction
The renovation was poorly done.
The builder did not build to the correct level of the neighborhood. Meaning, it may have been a basic cosmetic flip, but many of the sold fix-n-flips in the area are higher-end flips with nicer finishes. In this case, there may still be a deal to be had.
Watch the video below for more information