How to calculate ARV (after repair value) for a fix and flip
2 min read
Your after repair value (ARV) is the most important number in a flip. It decides how much you can offer, how much a lender will fund and whether you make money. Here's how to estimate it well.
What is ARV?
ARV is what the property should sell for after your renovation, based on what similar renovated homes nearby have actually sold for.
Step 1: Find comparable sales (comps)
Look for homes that have sold (not just listed) that are:
- Close by: ideally in the same neighborhood or subdivision
- Recent: sold within the last three to six months
- Similar: about the same square footage, bedrooms, bathrooms, lot size and age
- Renovated: finished to the level you're planning
Three to five good comps are better than ten loose ones.
Step 2: Adjust for differences
No two homes are identical. Adjust each comp up or down for differences like an extra bathroom, a garage, a bigger lot or a busier street. A real estate agent who knows the area is a huge help here.
Step 3: Use price per square foot as a check
Divide each comp's sale price by its square footage, then apply a reasonable price per square foot to your property. If that number is far from your adjusted comps, dig deeper.
Common ARV mistakes
- Using list prices instead of sold prices
- Pulling comps from a nicer neighborhood across a major road or school line
- Comparing to a fully custom renovation when your budget is for a standard one
- Ignoring the market's direction; if prices are softening, be conservative
- Assuming the best-case number; lenders and appraisers won't
Why your lender cares about ARV
Many fix and flip lenders cap the total loan at a percentage of ARV, so an inflated ARV can mean a smaller loan than you planned, or a deal that doesn't work. A well-supported ARV makes your loan smoother.
Frequently asked questions
What is the difference between ARV and appraised value?
ARV is the estimated value after renovation, while an as-is appraisal values the property in its current condition. Lenders often look at both: the as-is value for the purchase and the ARV for the finished property.
How many comps do I need to estimate ARV?
Three to five recent, nearby, similar sold properties is a good target. Quality matters more than quantity, so choose comps that truly match your finished property.
How far back should comps go?
Ideally comps should be from the last three to six months. In a fast-changing market, the most recent sales matter most.
Once you have your ARV, run the full deal through my calculator to see your profit.
Written by Jasmine Brown
Jasmine specializes in financing flips, new construction, DSCR, and multifamily nationwide. As an investor, she brings first-hand experience and strategic insights to her clients. Fund your next deal