ARV — after-repair value — is the estimated market value of a property once it is fully renovated, based on recent sales of similar finished homes nearby. It is the anchor number for flips, wholesale offers, and BRRRR refinances: the 70% rule, the max allowable offer, and the appraisal all trace back to it. ARV is established by comparable sales (comps), never by the seller's asking price or an automated estimate alone.
The formula / structureNo formula — ARV is derived from comparable sales, adjusted for size, beds/baths, condition, and location.
ARV: a worked example
Worked example. Three renovated 3-bed homes within a mile sold in the last six months at $212,000, $219,000, and $205,000. Adjusting for the subject property's extra half-bath and smaller lot, the supported ARV is $215,000. Every downstream number — the offer, the rehab budget's ceiling — keys off that $215,000.
What affects ARV
- The comparable sales selected (distance, recency, similarity)
- Adjustments for beds, baths, square footage, and lot
- Market direction between the comp sales and today
- Renovation level assumed — ARV presumes a finished, retail-ready home
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