Learn how to leverage Pellego to identify and organize comps for estimating the after repair value ("ARV") or new build value of a house.
Pellego uses algorithms based on historical flips to curate an initial set of renovated comps.
You can find these comps on the Comp Map and Comp Graph on the left-side column. In the center column, you can go through the details of the comps individually.
You can navigate through the comps using the arrows in the center or by picking a specific comp on the map.
The green Included Comps are the ones Pellego thinks will be most relevant for your analysis. The grey Not Included comps are comps that match the min/max ranges from the included comps.
You can change which comps are displayed using the Advanced Search. Changing the comp search does not affect which comps are included, though it may hide those included comps from display.
You can include comps thumbs up and exclude comps using thumbs down. Including comps is both for organizational purposes (you can save them) and also for value estimation (next section).
Because comps are not identical to their subject property, comp sale prices can be misleading. While a price per square foot improves the accuracy of a valuation, such approach does not account for differences such has an extra garage or a larger street size.
Rather than just average the per square foot price, Pellego's machine learning algorithms estimate a value of each difference. The sales price, plus/minus these differences is comp's Adjusted Value.
Adjusted Values not only provide a more accurate basis for comparison, but also provides the opportunity to expand your comp search.
For example, Pellego's research indicates that comp searches that go back 1-2 years (adjusted for market changes) produce more accurate appraisals than comp searches that only go back 3-6 months, because with fewer comps it is harder to distinguish if a seemingly good comp is an outlier.
This is not to say that older comps are as relevant as newer comps. Some comps are indeed more relevant than others, which is the subject of the next section: Weighing Comps.
Each included comp is assigned a Comp Weight, which represents how much its adjusted value affects the ARV and NBV estimates. Comp Weights are expressed as percentages and total 100%.
The default adjusted values and comp weights determine the Pellego ARV.
As you update which comps are included, the comp weights will update to fit 100%, and an "Adjusted ARV" based on the adjusted values of the new comps and their comp weight.
If you overwrite the After Repair Value field with a manually entered value (a "Custom ARV"), the Custom ARV will persist on the Flip Analysis even as you edit your comp assumptions.
Pellego's default comps are based on the current structure details. You can change these details by clicking Edit Structure in the Action Menu. When you do this, Pellego will give you the option to update your comp search and ARV based on the changes.
You can also change the structure to be a new house by clicking Rebuild Structure. When you do this, Pellego searches for comps based on the max house size for the lot square footage. The resale value and rehab budget will also update accordingly.