What is ARV (After Repair Value)?
ARV (After Repair Value) — The estimated market value of a property after all planned renovations and repairs are completed. ARV is the foundation of deal analysis for fix-and-flip investors and helps wholesalers estimate assignment fees.
How to Calculate ARV
ARV = Current Value + Value Added by Repairs
In practice, ARV is determined by finding comparable properties (comps) that have been recently renovated and sold in the same area. Look for properties with similar:
- Square footage (within 20%)
- Bedroom/bathroom count
- Lot size
- Location (same neighborhood or zip code)
- Condition (fully renovated)
Why ARV Matters for Deal Analysis
Every deal analysis starts with ARV:
- Wholesalers use ARV to calculate what a flipper would pay, then back into their offer price
- Fix-and-flip investors use the 70% rule: Maximum offer = (ARV x 70%) - Repair costs
- BRRRR investors use ARV to estimate refinance value and ensure they can pull their cash back out
Common ARV Mistakes
- Using comps from too far away or too old (6+ months)
- Over-estimating what renovations will add to value
- Ignoring market trends (appreciation or decline since comp sales)
- Not accounting for the specific condition of comparable sales
Related Terms
A real estate investment strategy where an investor contracts to purchase a property and then assigns that contract to an end buyer for a fee, without ever taking ownership of the property. Wholesaling requires finding deeply discounted deals and motivated sellers.
A property transaction that occurs without the property being publicly listed on the MLS (Multiple Listing Service). Off-market deals typically offer better pricing and less competition, making them highly sought after by investors.
A key performance metric that measures the total marketing spend divided by the number of closed deals. Cost per deal is more meaningful than cost per lead because it accounts for lead quality and conversion rates.
A real estate investor or buyer who purchases properties without mortgage financing. Cash buyers can close faster (often 7-14 days) and are the primary end buyers for wholesale deals.
Related Questions
What is wholesaling in real estate?+
A real estate investment strategy where an investor contracts to purchase a property and then assigns that contract to an end buyer for a fee, without ever taking ownership of the property. Wholesaling requires finding deeply discounted deals and motivated sellers.
Read full definition →What is off-market deal in real estate?+
A property transaction that occurs without the property being publicly listed on the MLS (Multiple Listing Service). Off-market deals typically offer better pricing and less competition, making them highly sought after by investors.
Read full definition →What is cost per deal (cpd) in real estate?+
A key performance metric that measures the total marketing spend divided by the number of closed deals. Cost per deal is more meaningful than cost per lead because it accounts for lead quality and conversion rates.
Read full definition →What is cash buyer in real estate?+
A real estate investor or buyer who purchases properties without mortgage financing. Cash buyers can close faster (often 7-14 days) and are the primary end buyers for wholesale deals.
Read full definition →