ARV stands for after-repair value: what the property should be worth once your renovation is finished. It is the most important number in a fix and flip, because it affects both your profit and how much a lender will fund.
How to estimate ARV
The standard method is to look at comparable sales (“comps”): similar properties that recently sold nearby.
- Recent: usually sold within the last several months.
- Close: ideally within a short distance, in the same neighborhood and school zone.
- Similar: comparable size, bedrooms, bathrooms, age, lot and finish level.
- Renovated: you want comps that reflect the condition your property will be in after the work, not as-is sales.
An experienced agent or the lender’s appraiser will typically be more reliable than listing prices or online estimates, which can be off.
How lenders use ARV
Fix and flip loans are often sized against both the purchase price and the after-repair value. A lender may offer a percentage of the purchase price plus the rehab budget, subject to a maximum loan-to-ARV. In plain terms: the loan generally cannot exceed a set share of what the finished property is expected to be worth. That share varies by lender, borrower experience and credit.
A quick sanity check on the deal
Many flippers use the 70% rule as a rough screen: the maximum you pay (purchase plus repairs) is about 70% of the ARV. It is only a guideline, since costs, markets and strategy differ, but it helps you avoid deals that leave no room for profit after financing, closing and selling costs.
Common ARV mistakes
- Using the highest comp instead of the typical one.
- Comparing against homes finished to a higher standard than you plan to deliver.
- Ignoring how long it takes to sell, which adds holding costs.
Run your own numbers
Try the fix and flip calculator to see your profit, then the estimator for a ballpark loan amount and rate range.