Quick Answer

After repair value (ARV) is the estimated market value of a property after all planned repairs are done. Investors use it to decide how much to pay for a fixer-upper. ARV comes from recent sales of similar, renovated homes nearby, not from the current condition of the house.

What Is After Repair Value (ARV)?

After repair value, or ARV, is what a property should sell for once it has been fixed up. It is a forecast, not an appraisal of the house as it stands today. Flippers, wholesalers, lenders, and buy-and-hold investors all use it as the starting number for a deal.

ARV matters because almost every other number in a fix-and-flip depends on it: your maximum purchase price, your loan amount, and your expected profit. If the ARV is wrong, the whole deal is wrong.

How ARV Is Calculated

ARV comes from comparable sales, called comps. You look for homes that sold recently, close to the subject property, in the renovated condition you plan to deliver. Good comps share these traits:

  • Location: same neighborhood or subdivision, ideally within half a mile.
  • Recency: sold in the last 3 to 6 months.
  • Size and layout: similar square footage, bedrooms, and bathrooms.
  • Condition: updated homes that match your planned scope of work.
  • Property type: single-family compared to single-family, not to condos or townhomes.

Take three to five good comps, adjust for differences such as an extra bathroom, a garage, or a larger lot, and use the adjusted values to set an ARV range.

Example: Three renovated comps sold for $240,000, $250,000, and $262,000. After adjustments, they point to a value near $250,000. That is your working ARV.

How Investors Use ARV

  • Setting a max offer. Most investors work backward from ARV. The common shortcut is the 70% rule: ARV x 0.70, minus repairs.
  • Financing. Many hard money and private lenders size their loans as a percentage of ARV, so a supported ARV can affect how much you can borrow.
  • Choosing an exit. ARV helps you decide whether a property works best as a flip, a rental, or a resale to another investor.

Example: ARV $250,000 x 0.70 = $175,000. Subtract $40,000 in estimated repairs and the maximum offer is $135,000.

Common ARV Mistakes

Most bad deals start with an inflated ARV. Watch for these errors:

  • Using list prices or asking prices instead of closed sales.
  • Pulling comps from a better school zone or across a major road or boundary.
  • Comparing to homes with a higher finish level than your repair budget allows.
  • Ignoring days on market. In a slow market, your real sale price and timeline can slip.
  • Trusting an automated online estimate without checking it against actual sales.

Frequently Asked Questions

What does ARV stand for in real estate?

ARV stands for after repair value. It is the estimated market value of a property after all planned repairs and updates are complete.

How do you calculate ARV?

Find three to five recently sold, renovated homes near the property with similar size, layout, and features. Adjust for differences such as bedrooms, bathrooms, garage, and lot size, then use the adjusted values to estimate what the subject property will sell for after repairs.

Is ARV the same as appraised value?

No. A standard appraisal values a home in its current condition. ARV is an investor's estimate of value after the planned repairs are finished. An appraiser can give a subject-to-completion value, which is closer to ARV, but only when asked.

How does ARV relate to the 70% rule?

The 70% rule uses ARV as its starting point. Maximum offer equals ARV times 0.70, minus repair costs. For example, $250,000 x 0.70 = $175,000, minus $40,000 in repairs, gives a $135,000 maximum offer.

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