ARV — After Repair Value — is the single most important number in wholesale real estate. Get it right and your deals fly off the shelf. Get it wrong and you waste everyone’s time.
This guide will teach you exactly how to calculate ARV so your deals are priced right and your cash buyers trust your numbers.
What Is ARV?
ARV stands for After Repair Value. It’s the estimated market value of a property after all renovations are completed. It’s what a retail buyer would pay for the property in fixed-up condition.
Example:
- Current condition: $120K (distressed, needs work)
- Estimated repairs: $40K
- ARV (after repairs): $220K
- Investor’s potential profit: $220K - $120K - $40K = $60K (before closing costs, holding costs, and your assignment fee)
Every cash buyer uses ARV to decide whether a deal makes sense. If your ARV is inflated, buyers won’t touch the deal. If it’s accurate, they’ll move fast.
Why ARV Matters for Wholesalers
As a wholesaler, you don’t do the rehab — but you need to calculate ARV accurately because:
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Buyers use ARV to make offers. Most use the 70% rule: Maximum Purchase Price = (ARV × 70%) – Repair Costs. If your ARV is wrong, their math doesn’t work.
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Your credibility depends on it. Serious cash buyers will verify your ARV. If it’s consistently inflated, they’ll stop looking at your deals. If it’s consistently accurate, you become their go-to wholesaler.
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It determines your assignment fee room. The spread between your contract price and the buyer’s maximum offer is where your fee lives. Accurate ARV = realistic fee expectations.
How to Calculate ARV: Step by Step
Step 1: Understand the Rehab Scope
Before you pull comps, you need to know what “after repair” looks like for this property. A cosmetic refresh and a full gut rehab produce very different end products — and very different ARVs.
- Cosmetic rehab ($15-25/sqft): Paint, flooring, fixtures, appliances, landscaping
- Moderate rehab ($25-40/sqft): Cosmetic + kitchen/bath remodel, some systems
- Full gut rehab ($40-60+/sqft): Down to studs, new everything
Your comps should match the intended rehab level. Don’t compare a cosmetic flip to a full gut renovation — they’re different products.
Step 2: Pull Comparable Sales
The best comps are:
- Within 0.5 miles of the subject property (1 mile max in rural areas)
- Sold in the last 90 days (6 months max in slow markets)
- Similar size: Within 20% of the subject’s square footage
- Similar layout: Same bed/bath count (± 1)
- Similar condition: Renovated to a comparable standard
Where to find comps:
- MLS (via a Realtor or tools like PropStream)
- Zillow/Redfin recently sold section
- County assessor records
- Privy, Propstream, Invelo (investor-focused comp tools)
Pull 3-5 solid comps. More is better for confidence, but quality matters more than quantity.
Step 3: Adjust for Differences
No two properties are identical. Make adjustments:
| Feature | Adjustment |
|---|---|
| Bedroom (± 1) | $3,000 - $5,000 |
| Bathroom (± 1) | $2,000 - $3,000 |
| Square footage | $15 - $30 per sqft |
| Garage (has/doesn’t) | $5,000 - $10,000 |
| Pool | $5,000 - $15,000 |
| Lot size (significant diff) | $2,000 - $10,000 |
| Age/condition | Case by case |
Rule of thumb: If your total adjustments exceed 15% of the comp’s sale price, that comp is too different. Find a better one.
Step 4: Calculate the Average
After adjusting all comps, average them:
- Comp 1 (adjusted): $248,000
- Comp 2 (adjusted): $255,000
- Comp 3 (adjusted): $261,000
- ARV: $255,000 (rounded average)
If your comps have more than a 15% spread, your data isn’t tight enough. Re-filter or find additional comps.
Common ARV Mistakes
1. Using Active Listings Instead of Sold Comps
Listings are asking prices, not market values. Only use closed/sold transactions.
2. Using Comps That Are Too Far Away
Real estate is hyperlocal. A comp 2 miles away in a different school district or neighborhood is unreliable.
3. Ignoring Condition Differences
A comp that sold in as-is condition shouldn’t be compared to your projected after-repair value. Match the condition.
4. Cherry-Picking High Comps
It’s tempting to use the highest comp to inflate ARV. Don’t. Buyers will catch it and lose trust. Use the average or lean conservative.
5. Not Accounting for Market Changes
If the market is declining, recent comps may overstate current value. Factor in trends.
How Accurate ARV Gets You Paid Faster
When you submit a deal to DispoBridge with an accurate ARV:
- Buyers respond faster — They can verify your numbers quickly and make a decision
- Less back-and-forth — No renegotiation because the ARV was inflated
- Higher close rate — Accurate deals close; inflated deals fall apart
- Repeat business — Buyers who trust your numbers come back for more
We review every deal submitted to our platform. Accurate ARVs get priority marketing to our 500+ buyer network.
Submit a deal with your ARV and let us find your buyer.