After-Repair Value (ARV)
After-repair value (ARV) is the estimated market value of a property after all planned renovations are complete. Investors use ARV to decide what to pay for a fixer-upper and to project profit on a flip or BRRRR deal.
ARV is estimated by running comparable sales (comps): recently sold, fully renovated properties of similar size, age, and location. Because every downstream number — maximum offer, rehab budget, refinance proceeds, expected profit — is calculated off ARV, an inflated estimate is the single most common way new investors lose money on a flip.
Lenders also underwrite against ARV: hard-money and renovation loans are typically capped at a percentage of ARV (often 70–75%), which is why the 70% rule uses it as the anchor.
Worked example
A Garland house needs $45,000 of work. Renovated comps on nearby streets sell for about $290,000–$300,000, so the investor sets ARV conservatively at $290,000. Using the 70% rule: maximum offer = (70% × $290,000) − $45,000 = $158,000.
Put it to work
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