The after repair value (ARV) is a crucial tool used by real estate investors and house flippers to estimate the potential value of a property after all repairs and renovations have been made. The formula for ARV is: 70 of the after repair value – repair cost = maximum offer price. This helps in determining the maximum amount that can be offered for a property.
The home appreciation calculator uses the basic formula A = P × (1 + R/100) n, where A is the value of the home after n years, P is the purchase amount, and R is the estimated repair costs. Experienced flippers can calculate ARV to predict the future value of a home and secure financing for repairs. This method of assessing value can be valuable to regular homeowners as well.
To calculate the ARV of any property, first determine the current value of the property, find out what will be the cost incurred in the repair work, and compare the price. Then, calculate the future value of the property using the formula: Future Value + (Future Growth)xCurrent Fair Market Value.
The after-repair value of a property can also be calculated by comparing it to recently sold comparable properties in terms of location, age, and other factors. The maximum purchase price can be calculated by adding 5 of monthly payments for a good condition house, 10 if in a poor state, and bringing separate funds/cash on day one for major items like new construction.
In summary, the after-repair value is a crucial tool for real estate investors and house flippers to estimate the potential value of a property after renovations.
📹 How I See The FutureOf Small Engine Repair Shops
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How to calculate future value of property?
The formula for calculating the future value of a property is as follows: Future Growth x Current Fair Market Value. In this formula, Future Growth is represented by the expression (1 + Annual Rate)^Years, where “Annual Rate” represents the annual percentage change in the property’s value over time.
How do you calculate present value and future value?
The present value formula (PV) is calculated by dividing the present value by the future value (FV), where FV is the future value, i is the decimalized interest rate, and n is the number of periods. The future value formula (FV) is calculated by multiplying PV by (1 + i) n.
Money today is always worth more than money tomorrow due to the fact that in modern economies based on fiat money, prices tend to rise every year. This means that $100 tomorrow will buy fewer goods and services than $100 today will. Inflation can also impact interest rates, but for now, we consider only nominal interest rates.
If you were offered $100 today, you would receive $1, 000 in a year for it. Most lenders would jump at this offer, but most borrowers wouldn’t. Instead, you would be willing to pay $110 in a year for $100 today, which is an interest rate of 10 percent ($10/$100 =. 1 or 10).
Annual compounding, or paying interest on interest every year, would allow your $100 investment to grow in value. This compounding period doesn’t need to be a year, and it is possible to compound interest continuously. However, unless otherwise noted, we will compound annually in this chapter.
How do I calculate future value?
The future value formula is a mathematical formula that calculates the present value of an investment based on the number of interest-compounding periods it will have. It is used to determine if an investment will yield high dividends in the future. The formula is expressed as FV=PV(1+i)n, where n represents the number of periods. This helps investors determine if their investment will yield enough dividends.
What is the future value of $1000 after 5 years at 8% per year?
The future value of a $1, 000 investment at an annual interest rate of 8%, compounded semiannually over a period of five years, is $1, 480. 24.
How much will $50,000 be worth in 20 years?
The table shows the present value (PV) of $50, 000 over 20 years with interest rates from 2 to 30. The future value of $50, 000 can range from $74, 297. 37 to $9, 502, 481. 89. This formula calculates compound interest on the new balance at the end of the period. Some investments may add interest at the beginning or have continuous compounding, requiring a slightly different formula. This article aims to help users make future value calculations themselves.
How to calculate present value of property?
The present value (PV) is calculated by dividing the future value of a future cash flow by one plus the discount rate raised to the number of periods. The formula involves subtracting the future value from the discount rate, which is the expected rate of return (interest), and dividing by the number of periods, which is the duration between the cash flow’s occurrence and the present date. The discount rate is a function of the riskiness of the cash flow, with greater risk resulting in a higher discount rate.
What is the easiest way to calculate present value?
The present value (PV) formula is a financial tool used to calculate the present day value of an amount received at a future date. It is derived from the compound interest formula, which involves calculating the present value (PV) and future value (FV) related to compound interest. The formula takes into account the rate of interest (percentage ÷ 100), the number of times the amount is compounding, and the time in years.
The present value (PV) is the initial amount, while the future value (FV) is the final amount, calculated as PV + interest. The formula is essential for determining the present value of an investment or loan at a future date.
How do you calculate repair rate?
The repair percentage for 100 RT joints can be calculated using three methods: Joint Wise, RT Film Wise, and Radiography Repair Percentage. The Joint Wise is the number of defective joints / total number of radiographed joints, while the RT Film Wise is the number of repair films / total number of radiographed films. The reference standard for calculating radiography repair percentage is Lr and Lw.
How do you calculate repair value?
The ARV of a property can be determined using a real estate formula: (Purchase Price) + (Value from Renovations) = After Repair Value. This formula compares the purchase price to the estimated value from renovations, indicating the expected increase in the property’s value. The process involves estimating the property’s current value, which is the market price of the property, and developing a repair list outlining the renovations needed. Certain projects, such as electrical and plumbing work, may be necessary for compliance with regulations. Other upgrades may improve curb appeal but are not necessary.
Next, look for comparable properties in the neighborhood that will look like your house after the renovations are completed. For example, if you’re adding a bedroom to a four-bedroom house or transforming an outdated kitchen into a modern space, assess the value of nearby properties with similar features. Starting with the estimated property value of these comparables, assess similarities and differences to generate your property’s estimated ARV.
How to calculate percentage of repairs?
The calculation for the percentage of repairs necessitated by radiography involves dividing the total length of repairs by the total length of welds radiographed in one week, Lr, and multiplying the result by 100. This figure, RR, represents the percent repair rate for 100 RT joints and random RT joints.
How do you calculate repair and maintenance cost?
To calculate the cost of maintaining, repairing, and operating an asset, consider the cost of labor, materials, suppliers (outsourcing), energy, and other expenses. The cost of ownership formula is: Cost of labor + Cost of materials + Suppliers (outsourcing) + Energy + Other Expenses. This formula only considers routine maintenance activities, minor repairs, and the cost of parts. Larger and more planned refurbishments, such as total renovations, are excluded from this calculation. To reduce maintenance costs, explore lean manufacturing techniques, which aim to eliminate eight wastes, including waiting times and inventory waste.
Optimizing your inventory can lead to extraordinary savings (between 5 and 30) by centralizing your database, keeping it up-to-date, stopping ordering duplicate parts, quickly discovering similar materials, comparing suppliers, and predicting what you will and will not need to buy. This results in more thoughtful, just-in-time purchasing and makes logistics easier. To reduce maintenance costs, consider using invoice and estimating software like Joist.
📹 2022 -Repair for Future
This discussion will start with a brief summary on the history of repair initiatives. We can report about our personal repair activities …
Honestly, it’s probably better to just join a shop. Starting your own shop is always hard, and the insurance is expensive. I’ve talked to my dad about opening up an automotive shop but the insurance, equipment, building, and customer base are going to make it tough. Not to mention, there’s going to be that one customer looking for a free repair and they don’t care if they ruin somebody’s business to get it.
In my rather rural area there is a man that always has a couple of lawn mowers or snowblowers in front of his house for sale. I assume he gets broken ones for free or for a small amount, fixes them and then resells. This seems like the best way to make a side gig unofficial lawn mower repair business work. No worries about unhappy customers if you cannot fix their machines in a timely manner plus you can take a break from repairing with no consequence if you want to.
In my area, the Amish have multiple engines that they use on their washing machines, water pumps, shops, wood cutting, mower washing, cement mixers, and many more. Don’t know what they will do when gasoline engines are no longer available, or parts are not available. They are a large part of my business, and I am sad for them. Terrible that the Gov’t. thinks they know what is good for people! They have no idea about middle America. Thanks for the article.
I’ll try and explain since I own a small engine shop, been in the industry 24+ years, i bought a commercial property in 2020 and opened a legit business turning a hobby into a full time business, small engine repair IS NOT a disappearing industry – in three years i have seen more growth than i ever anticipated, with the costs of new equipment being outrageously expensive, repair industries are booming, now with out getting into too much personal details – insurance is not that much, i have 300K coverage and 30K inventory and it costs me less than 50/mo, i have the brains, knowledge and skills to run a business, most people do not. I also do a ton of warranty work for many mfg’s, as for retail side of things i only sell parts and i sell a TON of parts, i DO NOT sell new equipment, it’s too much hassle, having to spend 25K on a floorplan pay as sold and hope it sells or pay loads of interest, that’s not for me. i service both residential and commercial. i REFUSE to work on battery stuff, it’s a safety and fire hazard and my insurance won’t cover losses due to battery fires, you don’t need alot of insurance, general liability and theft/inventory is all anyone would need, for me building insurance is irrelevant plus MOST insurance providers won’t cover commercial buildings. Also i disagree with needing an attorney, that’s what insurance is for! Only time i needed an attorney was for when i bought my shop and when i had a survey done for future construction and found issues pertaining to real estate (i’m also a real estate investor) Bottom line is unless you know what your doing, have years of experience, know HOW to run a business, then go for it, be prepared to shell out 300K or more for me it was 200K to buy a building and 100K for inventory and other things, along with hiring employees, i didn’t start making good profit until this year which is my 3rd, 1st year i actually lost profit, second year i made some, this year i can already tell i’ve made more than the following year.
One idea I had was to buy a good sharpener for chain saws, lawn mowers and such. You can work out of your garage and not have to worry about gas or electric engines. If it’s a yard tool it’s probably going to have a blade on it. Our local TrueValue store had a 3-week waiting period just to sharpen a chain saw.
Like I said before it isn’t like the electric equipment is any better for the environment. In fact it may be even worse than fossil fuels because not only are we damaging the environment by mining for batteries, but actual slave labor is being used to obtain those materials. And to top it all off of the mines are located in countries that will become our enemies the moment World War 3 breaks out. So expect to see a lithium battery shortage in this country once that happens.
I talked to a gentleman that had a repair shop, when I asked him if his business was doing good, he said, “look up @ the rafters & I saw @ least 50-75 weed trimmers hanging, he said all these trimmers have been repaired & waiting for pickup & some he said had been hanging over 2 years. I took from that business not doing well.
There is money to be made still but you are right gas lawnmowers are becoming a thing of the past and in the not too distant future there will be no gas mowers. I would say if starting a business you need to have trade contacts like a few lawn care guys who have a few machines and they often break as being used daily. That’s how i started i already had the contacts from my previous job so i was lucky but it will be harder if you don’t have contacts.
Skip the big box stores while you still can. Find a local dealer and support them as much as you can. My neighbor owns a small equipment shop and I buy everything I can from them. They are an Echo dealer along with Husqvarna and Toro. Nice people and when you walk in and talk to someone they know exactly what they’re talking about, unlike the big box stores. My Echo SRM225 was the same price there as Home Depot as is the trimmer line, heads and tune up kits. I’d just rather give my money to my neighbor than a large corporation.
You are so right about opening a small engine. I always said small engine small profit. To do correctly after paying the bills there’s nothing left. You are better off working for someone else, sure your not going to get rich but it’s better then working 80 hours a week to keep a float. A good side hustle would be to sharpen chain saw blades and mower blades.
Yep. As a blacksmith, I can tell you all about the horrors of trying to run your own small business. A lot of people will say that it’s my fault for trying to do something so “antiquated”, but they miss the point entirely because, like most people, they don’t actually think beyond the surface level. Blacksmithing, like the other Traditional Trades, isn’t exactly “antiquated” because there is demand for the service. However, people have long since stopped thinking about what are called 2nd Order Effects. In other words, when you support “minimum wage laws” because you think it’s awesome and will help decrease poverty, what you really accomplish is to increase poverty because you drive up the cost of doing business. It’s easy to say that the mean ol’ business owners should just pay their employees more, but that’s not actually possible. Even if it was, labor costs are always a factor in the price of the goods and services a company offers…. just like the company’s electric bill or sewer service. When I go to the metal supplier to get a single bar of steel to forge into something amazing, a small fraction of the price for that bar of steel goes to pay for the employee’s wages. Okay, but that bar had to be trucked to the re-seller, and that driver had to be paid, too. And don’t forget that the guys who smelted the iron need to get paid, just like the guys who dug the ore. All along the manufacturing process, the “minimum wage laws” were in effect and that drove up the cost of the bar I bought.
Heres the problem about electric equipment kids are mining lithium cobalt in third world countries. The petrolum to make the plastics for the housings of the batteries the copper for the wires and the iron to make steel the coal to mine for electricity the natural gas for power uranium for nuclear all the resourcrs i mentioned are non renewable most can be recycled the most envromentally freindly lawn mower is a cow horse or goat. If small engines disapear which i feel will still be around But will be a Niche market like Farming forestry large property owners meaning (they arent disapearing all together) I have other interest besides mowers and weed eaters its. Guitars and Basses i have a couple Ibanez guitars a Blue RG450DX and a Acoustic a few other brands Squire (Fender) and Epiphone.
I found out about even trying to keep what I had going, much less taking anything else on and it wasn’t good and we all will get there sooner or later BUT it’s just like you said. You can work off a tailgate or dive in as deep as you think you can stand BUT remember you are dealing with people that do less and less and and could care less and less. The battery industry will be expanding and more and more fixable equipment will be going to china. I went on MTD’s website and an electric motor of which our zero turn has four of is $500 each. That’s not batteries of which it has 2. No touch circuit boards but a spare magnetic key is $26 shipping and all. 110 volt battery warmers to keep from having to take the batteries out in winter to maximise their life are around $145 a piece which is the way I’m looking to go because I’m not regressing in age either. My pal with his own shop is covered up BUT he doesn’t charge five prices to fix stuff and that makes a big difference. As the old saying goes,’ Let your conscience be your guide’ as far as starting a repair business. I’ll try and keep ours going or I’ll take it to my pal. Thanks nd Blessings.
I’ve had my own automotive and small engine repair shop for 22 years now, and just like everything else, things change…on the small engine side, I work on very few small engine powered pieces of equipment….with parts & labor becoming more expensive I have to do a quick assessment of each piece that comes in….many times the cost of the repair is more than replacing with a new item….the majority of big repair work is done on larger equipment where it’s cheaper to repair than to replace
My next door neighbor bought a new battery powered push mower to mow his small front yard. His backyard has been replaced with a huge pool with concrete so he doesn’t have to mow it. His battery has degraded in half a season to the point that he can’t mow his yard. He borrows my gas mower to finish it. 😂 My mower is a freebie husq with the Honda Gx 160. Swapped gas with recreational fuel and now it’s a one pull machine from a no run curb find. I was a small engine mechanic at a shop for years. I loved the job. I love diagnosing and fixing things.
As for the future of outdoor power equipment. There are literally millions of pieces of gas equipment that not only run, but have many years of life left in them. There will always be a market for gas equipment, although the market share may change. The jury is still out on battery equipment and the next 2-3 years will reveal more. Personally, I will NOT be working on ant battery equipment period. Gas engines and equipment built this country and that is where I stand. I do zero advertising, and am currently 3 weeks out on repairs (1 person shop). I stay busy year around. There is not enough money to be made to even hire a “helper” and I am maxed out. Don’t think you will get rich doing this (or many other businesses for that matter). I am passionate about my business and it shows through in my work and results. I will be going to Louisville, Kentucky again in October to the GIE Expo (outdoor power equipment). Largest OPE trade show in America and 7th largest trade show in the world. Will know more about trends, future outlook, etc. after the show. I enjoy your website and try to remain as motivated, positive, and optimistic as possible. Time will tell…
You are spot on. Try opening up one in California with all the hazmat and epa licenses. I actually just stopped my home hobby business. I made a nice living at it. parts are getting to be an issue as you stated and we won’t talk about how most lawnmowers are pretty much throw away. Seriously, a plastic carburetor? Reminds me of the Chrysler thermoquads that caught fire. How cheaply can you make this junk? Also, gas will probably be $10 a gallon when the electric movement is finished. Fewer satiations mean gouging from the rest.
Outdoor Power Equipment Dealerships ” Small Repair Shop ” ” We are a dying Breed ” I have been in the Industry since 1985 and owning since 1990. The last 2 yrs has been very bad, we had a extreme drought in the gulf south area. that did not help us any. I am in the New Orleans area . The rising cost of goods and insurance is killing us. I will say this Don’t sell New Equipment, Just Focus of Service and Repairs and you can make it. Stay small. Good Help is hard to find.
alot of places near me are out of a home garage. Ive only seen the places because i work on my own equipment and am happy doing that and maybe helping a neighbor out but most people in my neighborhood have a service that does their lawn. Seems like this generation of home owners doesn’t really care to do their own lawn but i enjoy it.
This is just me thinking out loud you guys: So I dont think too many guys just wake up and say that they want to start a small engine biz. I think there are different types of men and women that like a challenge and think like i do. “You cant break broken”. With a few tools cheaply aquired dissembly is easy,reassembly may require some reseach like what home garage provides so expertly. The worst thing that can happen is if you make a repair and are successful and sell that repaired item and actually gained experience AND made a few bucks! Now you’re hooked. Those harbor freight tools are beneath you so you start to aquire more tools. Why not? You’re using profits from repairs and items you sold. It makes total sense to me too. Word spreads you guarantee or warranty your work and charge a fair price. It only seems fair that you should grow to accommodate everyone. BUT because you started out with lawn mowers and you have a good reputation here come the weed whippers and the blowers and the hedgers and the pole saws and the occasional tractor. Your tools that were 1/4 drive have moved to 3/8 drive and 1/2 drive. You yourself need to study up on 2 strokes and 4mix engines. I guess what im saying is this is how it happened to me. Ive kept it simple by choice, support the work that i do with a warranty, and get a fair or below average price. The work never stops, the texts never stop, and i generally have bigger guys with more than 1 piece of the same equipment and will sometimes wait weeks for me to work on their machines.
It makes no sense that everyone is going electric if gas mowers are easier to fix and cost less money than buying a new electric mower every year that costs more. A lot of small engine repair shops have more experience with gas equipment that can be fixed easier and very cost effective than getting an electric mower every year that the mother board gets broken all the time you spend more money on than you do with your gas push mower. And has engines have been around longer than I can remember and we switch to electric mower that people are still not familiar with and is less likely to be fixed. I would think people would want to go the cheaper with a gas lawn mower that can be repaired easier than a electric lawn mower. I would want to have something that is more efficient and easier to fix I think it’s common sense to people who understand what they are doing and don’t want to go down the expensive route. It’s sad to see gas mowers are being banned after years of efficiency and something being more repairable. I plann to stick with gas mowers as long as I can.
Ever since when I was a little kid the the 1970s, I have been hearing that electric cars were the way of the future and just a few short years away. Now, here we are in late 2023 and after the closest we’ve ever gotten to “standardizing” electric cars seems to be turning sour and being canceled, as battery technology has still not evolved enough to replace fossil fuels in convenience, cost, and cheap materials. Granted, lawn equipment is a lot different than automobiles. If your electric mower battery dies, you push your mower back into the garage and either recharge it or purchase a new battery and finish mowing the next day whereas a dead electric car leaves you stranded and late for wherever your traveling to; quiet a bit more than the irritation of not being able finish mowing your lawn! That being said, lawn equipment isn’t cheap and the idea of having to purchase a $500.00 plus electric mower every 3-5 years won’t sit well with most consumers given that a well cared for and serviced gas mower can last over a decade. In my mind, the question would be is it the short sided greed of the lawn care equipment industry looking to force consumers into inferior, high priced electric equipment for a quick buck now with no consideration of the damage to their reputation in the coming years or is a political push to end self home lawn care completely in the near future to support the fast growing professional lawn care service industry and the home lawn care equipment industry can see the handwriting on the wall, know they have no future, so they are just providing what the current consumer movement seems to want, at the lowest investment and highest retail profit possible, knowing their days are numbered and there will be no future for their products, anyway!
Sorry in advance for the long comment. Your answer to the question is almost exactly what I expected it to be. I have been perusal a lot of your articles lately after I started getting interested in small engines and they have been extremely helpful in getting my own mowers working. It seems like when people get rid of a mower that won’t start, 90-95% of the time, the carburetor just needs a good cleaning or replaced. I may be exaggerating on the percentage, but most articles I’ve watched of yours and others, the carburetor is the main issue. perusal your articles and working on my own has got me thinking about finding free or cheap mowers that people are getting rid of and fixing them to turn a small, but decent profit. However, for the same reasons you mentioned, I don’t think I would do it full time, just for extra money on the side. I enjoy my day job and that’s how I got interested in small engines in the first place. At this point I am a novice when it comes to repairs; anything past the carburetor and a few other minor things, I am ignorant to, but thanks to your articles and some others, I’m learning quite a bit and I enjoy it, so at this point it’s just a small learning hobby that I do when I have time. However, the project I’m currently working on I think may be a little more complicated than just a carburetor clean or replacement. It’s an old toro personal pace that belonged to my girlfriends dad. It starts rough and doesn’t rev up and only runs for a few minutes before it dies.
I’m getting to my “golden years”, and I’ve considered doing some small engine repair as a “side hustle”, and to keep me busy. I would still want to make money at it, and that’s where the problem comes in. IMO, there’s just not enough money in such a business, and the future projections are not good. To make it worth it to me, I’d have to charge more than people would be willing to pay. So I’m just going to keep my equipment in good condition, and spend my time doing yardwork, gardening, and traveling.
Best thing to do to get started IMO is to get free mowers or any lawn equipment repair and sell till you fill comfortable about taking customers equipment to repair. Facebook and Craigslist people give them away for free. Or if you see it on a curb pick them up because most people give up fast and buy new and people that can’t afford new are the ones that buy your free machines with little to no money invested
No I would never start a business Too much red tape I have a small engine repair place out here We took our snowblower to him last year. We didn’t get it back to the following year. I was saying I wanted it back sooner. They had too much work. I couldn’t have it back sooner. I will not go back to him. I cant work on it cause I had my knees done Thank you for the article
After perusal your article and reading some of the comments, here is my take. I have run my small engine repair shop now for 5 years. It is a very tough business, like most businesses are. If you have never been an entrepreneur and run a business, I would say outdoor power equipment is not much different than many other businesses from this standpoint. Most people do NOT know how to run a business, have no business running a business, and will fail at that business. Why? For many reasons some of which are: no money, no organization skills, no customer service skills, no actual job skills for needed business, poor follow up, not honest, the list goes on. People have no idea what business owners go through on a daily basis, nor do many even care. Bottom line is that is tough. You better be good at it, learn quickly, and love it if you are going to stay with it long term.
To be honest I hate to agree with some of this article but I plan and making a repairs and maintenance service small business doing both bicycles and small engines. In my area I’ve seen a couple places that has gotten away with just running from there garage at home still and a couple that started thar way until they grew enough to need a dedicated shop to work in or turn it into a mobile service on the small engine service.
Hi had a question about an old article you made 2 years ago. I know you mentioned in your articles if you had any questions to just ask. it was a toro commercial with a Kawasaki engine on it. I was looking to buy one and i cannot find one to next year. I know you had one and i was curious did and if you did have the single bail brake that engages the drive and the mowers blades. Will the mower let you start it without holding the blade brake like the honda hrx217hya mowers? I asked my toro dealer and he did not even know the answer to that one which was odd. I know the double bbc it does but was curious if you could start the engine and let it run without holding the bar back. Want to go with that model with the Honda commercial engine due to less things to go wrong with it. The BBC has a lot more items an extra belt and a few other things Id rather not have to deal with. If you could let me know when you get a chance would appreciate it. thanks. As for starting a shop i dont blame you i wouldn’t id stay a hobby due to all the crap you’d have to deal with and in my opinion its just not worth the time hassle and customers complaints and such and right now you can do it on your own time.
I see the lawnmower side of it yes however in the colder climates there will still be a demand for gas snowblowers. The electric ones just will not cut it. Being left outside as well as not producing any heat while running to heat up cables/belts is just a disaster waiting to happen. Lawnmowers as well will also be way more expensive due to having to replace batteries as well as other critical components. Sadly this is what the world is coming to.