Educational Guide
What Is ARV? After Repair Value in Real Estate, Explained
ARV meaning, the formula, how to calculate it from comps, and how the 70% rule turns an ARV into an offer — with a quick calculator below.
ARV meaning: the plain-English definition
ARV stands for After Repair Value — the estimated market value of a property once all renovations are complete. It is the answer to one question: what will this house sell for when it looks like the renovated houses around it?
A distressed property has two values. Its as-is value is what it would fetch today, condition and all. Its ARV is what it would fetch fully fixed up. The gap between the two — minus what the repairs cost — is the raw material of every flip, every rental rehab, and every wholesale deal.
ARV in real estate: why every deal starts with it
ARV is the anchor number for the entire investment chain:
- Wholesalers use ARV to price their offer to the seller and their assignment to the end buyer. Get the ARV wrong by 10% and the whole spread evaporates.
- Fix-and-flip investors underwrite from ARV backward: sale price at ARV, minus repairs, holding, and selling costs, equals what they can pay.
- Lenders — especially hard-money lenders — cap loans at a percentage of ARV (commonly 65-75%), so the number determines how much financing a deal supports.
- Buy-and-hold investors use ARV for post-rehab refinance math (the "R" in BRRRR).
Because every party re-runs the number independently, an inflated ARV does not survive contact with the market. Deals priced off real comps move; deals priced off wishful ARVs sit.
How to calculate ARV (the comp method)
The standard method is comparable sales — "comps." The process:
- Pull 3-5 sold comps. Recently sold (last 90-120 days), within roughly 0.5 miles, similar square footage (within ~20%), similar bed/bath count — and crucially, renovated condition, because ARV assumes the subject will match them.
- Compute price per square foot for each comp: sale price ÷ square footage.
- Blend the comps, weighting the most recent and closest sales more heavily. Outliers (an emotional overbid, a distressed under-sale) get less weight or get dropped.
- Multiply the blended price per square foot by the subject property's square footage.
- Adjust ±5-10% for features the per-square-foot math cannot see: lot size, garage, pool, view, school zone.
Our free ARV Estimator does the blending math for you — enter up to five comps and it weights them by recency and distance, with the formulas shown.
The ARV formula and the 70% rule
The core formula:
ARV = blended comp $/sqft × subject sqft
On its own, ARV is just a value estimate. It becomes an offer through the 70% rule, the standard heuristic for what a cash buyer can pay and still profit:
MAO = (ARV × 0.70) − Repair Costs
MAO is the maximum allowable offer. The 30% buffer covers the buyer's closing costs, holding costs, selling costs, cost of capital, and profit margin. The multiplier flexes by market — 75-80% where buyers compete hard, 60-65% in slower markets or on heavy rehabs.
Quick ARV → offer calculator
Enter your comp-based value estimate and repair budget. The calculator returns the ARV and the 70%-rule maximum allowable offer.
Directional only — a first-pass screen, not a substitute for real comps and a contractor walkthrough. For weighted comp math use the ARV Estimator; to test multipliers and see assignment-fee scenarios use the Deal Analyzer.
Know your numbers? Submit the deal — we bring the buyer.
Submit a DealCommon ARV mistakes
- Comping against unrenovated sales. ARV assumes renovated condition — comps must be renovated too, or the number lands low and good deals get missed (or, comped against retail-perfect new builds, lands high and deals die).
- Trusting AVMs (Zillow, Redfin) as the ARV. Automated estimates cannot see condition and routinely run 5-15% hot on distressed properties. Sanity check only.
- Stretching the comp radius. A mile away in a mixed metro can be a different market entirely. Stay near half a mile in urban and suburban areas.
- Using stale comps. Sales older than ~6 months reflect a different market. Weight recent sales more; drop anything ancient.
- Ignoring feature gaps. Per-square-foot math misses lot size, garages, pools, and school zones. Adjust the final number 5-10% for how the subject truly compares.
For the full walkthrough of where ARV fits in a wholesale transaction, see the complete guide to wholesaling real estate; for the paperwork side, the wholesale contract guide and assignment contract guide.
FAQ
What does ARV stand for in real estate?
ARV stands for After Repair Value — the estimated market value of a property once all renovations are completed. It answers the question: "what will this house sell for when it is fixed up to match the renovated homes around it?"
What is the ARV formula?
ARV = average price per square foot of renovated comps × the subject property's square footage. In practice, wholesalers pull 3-5 recently sold, fully renovated comparable homes within about half a mile, compute each comp's price per square foot, blend them (weighting recent and nearby sales more heavily), and multiply by the subject's square footage.
How is ARV different from market value?
Market value is what the property would sell for today, in its current condition. ARV is what it would sell for after renovation. A distressed house might have a $120,000 as-is market value and a $200,000 ARV — the gap, minus repair costs, is where flip profit and wholesale spread live.
Does ARV include repair costs?
No. ARV is the finished value only. Repair costs are a separate input — they get subtracted when you turn ARV into an offer. The 70% rule does exactly that: maximum allowable offer = (ARV × 70%) − repair costs.
Who calculates ARV in a wholesale deal?
Everyone with money at stake runs their own number. The wholesaler estimates ARV to price the deal; the end buyer re-runs it before committing; a lender or appraiser may verify it if financing is involved. Deals fall apart when the wholesaler's ARV is 10-15% higher than what buyers' own comps support — which is why comp-based math beats online estimates.
Can I use Zillow or Redfin estimates for ARV?
Only as a sanity check. Automated valuation models are built for retail listings and cannot see condition, so they tend to over-estimate by 5-15% on distressed properties. The standard method is manual comps: 3-5 renovated sales within half a mile, sold in the last 90-120 days, similar size and bed/bath count.
ARV checks out?
Submit the deal — we bring the buyer
Zero upfront cost. We market your contract to 100+ active cash buyers and get paid only when it closes.