How to Calculate ARV (After Repair Value)
After repair value (ARV) is what a property should sell for once it's fully renovated. Every flip, BRRRR and wholesale deal starts with it: your offer, your loan and your profit all depend on getting ARV right.
Step 1: Find recent, nearby sales
ARV comes from comparable sales (comps): renovated homes that actually sold, not listings. Good comps are:
- Recent: sold in the last 3–6 months. Older sales miss market changes.
- Close: within about half a mile in a city, or up to a mile in rural areas. Stay on the same side of major roads, highways and school boundaries.
- Similar: within about 20% of the square footage, similar age, bedrooms, bathrooms, lot size and style.
- Renovated: finished to the level you plan to renovate to. A dated house is not a comp for your flip.
Step 2: Compare price per square foot
Divide each comp's sale price by its living area. Look at the range. If most renovated homes sold for $210–$230 per square foot and your house is 1,600 square feet, the ARV is roughly $336,000–$368,000.
Step 3: Adjust for differences
Adjust each comp up or down for what it has that yours doesn't: an extra bathroom, a garage, a pool, a bigger lot, a busy street. Investors often use rough values such as $5,000–$15,000 per bathroom or garage space, depending on the price range.
Step 4: Choose a conservative number
When comps disagree, lean toward the lower middle. A buyer's appraiser will. Being $20,000 too high on ARV can erase the profit on a typical flip.
Don't use automated home value estimates as your ARV. They describe the home as it is today and often miss condition, which is the whole point of a flip.
Common ARV mistakes
- Using active listings or pending sales as if they were sold prices.
- Comparing a 3-bed, 1-bath house with 3-bed, 2-bath comps without adjusting.
- Picking only the highest sale in the neighborhood.
- Ignoring that the comp had features (pool, extra lot) your property doesn't.
Frequently asked questions
How many comps do I need for ARV?
At least three good sold comps. More is better when they agree. If you can't find three within half a mile in six months, widen the distance or time carefully and adjust more.
Is ARV the same as appraised value?
ARV is your estimate of the future value after repairs. The appraisal is the lender's opinion at the time of the loan. A good ARV estimate should match what an appraiser would find for the renovated home.