ARV Calculator

What ARV means

ARV stands for after repair value. It is what the property will be worth once the renovation is finished, and it is the number every other figure in a flip depends on. Your loan amount, your maximum offer and your profit are all derived from it.

How to estimate ARV properly

ARV is set by comparable sales, not by adding your renovation budget to the purchase price. A $55,000 renovation does not automatically create $55,000 of value. It creates whatever value the market has already demonstrated it will pay for that finish level in that neighborhood.

1. Find three to five properties that have actually sold, not listings
2. Keep them within roughly half a mile and sold within the last six months
3. Match square footage within about ten percent, plus bedroom and bathroom count
4. Match the finish level you are actually going to deliver
5. Adjust for meaningful differences such as garage, lot size or an extra bathroom

The 70 percent rule

The traditional formula is that your maximum offer equals seventy percent of the after repair value minus the renovation budget.

Maximum Allowable Offer = (ARV x 0.70) minus Rehab Budget

The thirty percent that the rule holds back is not profit. It absorbs holding costs, financing costs, selling costs including agent commission, and the renovation overruns that happen on most projects. Investors who treat the full thirty percent as margin are consistently disappointed at closing.

When 70 percent is the wrong number

In competitive markets, seventy percent may not win a single deal. Experienced operators sometimes move to seventy five percent when they have reliable contractor pricing, a short renovation timeline and high confidence in the comparable sales. That is a calculated reduction in margin, not a discovery of extra value. Move the percentage only when you can defend why your execution risk is lower than average.

Once you have a defensible ARV, model the whole deal with the fix and flip profit calculator to see net profit after every cost.