What Is ARV? After-Repair Value Explained
ARV is the finished value of a property after renovation. It is the number every flip, BRRRR, and rehab loan is built on.
After-repair value (ARV) is what a property will be worth once it is renovated to the standard of the updated homes around it. It is not what the property is worth today. That number is the as-is value, and the distance between the two is where every flip, BRRRR refinance, and rehab loan lives.
Why ARV anchors everything
Work through any deal and you will find ARV at the top of the equation. A flipper's profit is ARV minus purchase, rehab, and costs. A BRRRR investor's refinance is a percentage of ARV as the bank appraises it. A hard-money lender sizes the loan as a share of ARV.
Get ARV wrong by ten percent and every number downstream is wrong by more than that, because your costs do not shrink to match.
How ARV is actually calculated
ARV comes from renovated comparable sales: recently closed homes near the subject that match its size and type and are already updated. The discipline is in the filters.
Renovated only
A dated sale tells you the as-is market, not the finished one. Mixing the two is the most common ARV error.
Closed, not listed
Asking prices are opinions. Closings are facts.
Same type, similar size
A townhouse does not prove a house's value, and a 2,600 square foot comp cannot price a 1,400 square foot subject. Stay within about twenty percent.
Close and recent
Same submarket, and ideally inside the last six months.
Beginners take the prettiest nearby sale and call it the ARV. One flattering comp is a story. A value is what the cluster of qualifying comps supports after adjusting for size and condition. If you cannot find a few renovated closings that genuinely match, that is information too: your ARV carries a wide band, and your offer needs to protect you for it.
| Purchase price, dated condition | $96,000 |
| Renovation budget | $38,000 |
| All in | $134,000 |
| ARV, from renovated comps | $198,000 |
| Equity at completion | $64,000 |
The margin exists because the finished value was known before buying. Miss the ARV by ten percent, about $20,000 here, and a third of the equity is gone before the first wall is painted.
Run an address through the Deal Analyzer and open the comparables tab. Check each comp the tool selected against the four filters above. You are training the same judgment an appraiser will later apply to your deal.
Put this lesson to work on a live address.
Run ARV on any address with the Deal Analyzer
