If you’re flipping houses or planning a BRRRR strategy, one of the most important numbers you’ll need to know is your After Repair Value (ARV) — and knowing how to calculate it correctly can make or break your deal.
Whether you’re talking to lenders, analyzing comps, or pitching to partners, the ARV sets the stage for your entire investment. Let’s break down what ARV is, how to calculate it, and how to avoid common mistakes that could cost you thousands.
What is ARV?
ARV (After Repair Value) is the estimated market value of a property after all planned renovations and repairs are complete. It helps investors and lenders determine whether a property is worth the investment and how much financing might be needed.
Think of ARV as your target number — it’s what you expect to sell or refinance the property for once it’s rehabbed and ready.
How to Calculate ARV
To get an accurate ARV, follow these three simple steps:
1. Pull Comparable Sales (Comps)
Start by looking for 3–5 recently sold properties in the same area that are:
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Within ½ mile of your property
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Similar in size, bed/bath count, and layout
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Recently renovated
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Sold within the last 6 months
Use the MLS, Zillow, or work with a real estate agent or appraiser to gather this data.
2. Adjust for Differences
Not all comps are created equal. If your property has an extra bedroom or smaller lot size, adjust your numbers accordingly. For example, if a comp has a finished basement and yours doesn’t, subtract the value of that feature from the comp’s price.
3. Estimate Conservatively
Once you’ve adjusted your comps, calculate the average selling price. This becomes your estimated ARV. But here’s the pro tip: stay conservative. If your top comp is $300,000, but others hover around $275,000, base your ARV closer to $275,000 to avoid overestimating.
Why ARV Matters
Knowing your ARV helps you:
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Secure better financing (most hard money lenders lend a percentage of ARV)
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Set a realistic purchase price
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Plan your renovation budget
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Project your resale or refinance value
At Conduit Capital, we use ARV to determine how much we can lend you — typically up to 70% of ARV, minus rehab costs. So getting this number right is in your best interest (literally).
Common Mistakes to Avoid
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Using outdated comps – Stick to sales within the last 6 months
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Ignoring location factors – A house on a busy street won’t sell like one on a quiet cul-de-sac
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Over-improving the property – Don’t rehab past the neighborhood’s ceiling value
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Using listed prices instead of sold prices – ARV should always reflect closed deals, not wishful thinking
Final Thoughts
Mastering the ARV formula isn’t complicated — but it does take practice, solid data, and a realistic mindset. When in doubt, lean on professionals: appraisers, agents, and experienced investors who know the local market.
