ARV stands for after-repair value: the estimated market value of a property once a planned renovation is finished. In real estate investing, ARV is the number that decides what you can pay, how much a lender will lend, and whether a flip or BRRRR deal makes money.
What Does ARV Mean in Real Estate?
As-is value is what a property is worth today, in its current condition. ARV is what it should be worth after your improvements, based on what similar renovated homes nearby have recently sold for. The gap between the two, minus your costs, is your profit potential.
How to Calculate ARV
There are two common methods.
1. Comparable sales (the method appraisers use)
- Find 3–5 homes that sold in the last 3–6 months, close by and renovated to the level you plan.
- Match them on size, beds and baths, age, lot and style.
- Adjust for differences, such as an extra bathroom or a garage.
- Average the adjusted prices. On a per-square-foot basis, multiply the average $/sq ft by your property’s square footage.
Example: three renovated comps sold at $205, $215 and $210 per sq ft, an average of $210. Your home is 1,600 sq ft, so ARV ≈ 1,600 × $210 = $336,000.
2. Value added (a quick check)
ARV ≈ as-is value + the value your renovation adds. It’s useful as a sanity check, but lenders and appraisers rely on comparable sales.
How Lenders Use ARV for Fix and Flip Loans
An ARV loan is sized partly on the after-repair value rather than today’s price. At Lend Private Money, fix and flip loans cover up to 90% of the purchase plus 100% of rehab, but the total can’t exceed 75% of ARV. Ground up construction loans use the same 75% ARV cap.
With an ARV of $336,000, the maximum loan is 75% × $336,000 = $252,000, even if 90% of purchase plus rehab would come to more.
See how this works on our fix and flip loans, or call 407-401-8790 to run your numbers with a loan specialist.
The 70% Rule and ARV
Many flippers use the 70% rule as a quick filter: maximum purchase price ≈ (ARV × 70%) − repair costs. With a $336,000 ARV and $50,000 of repairs, that’s about $185,200. It’s a rule of thumb, not a guarantee. Always check the full numbers, including holding and selling costs.
Common ARV Mistakes
- Using list prices instead of sold prices
- Comps that are too far away, too old, or not renovated
- Overbuilding with upgrades the neighborhood won’t pay for
- Ignoring market shifts during a 6–12 month project
ARV FAQs
What does ARV stand for in real estate?
ARV stands for after-repair value: the estimated market value of a property after planned renovations are completed.
How do you calculate ARV?
Find 3–5 recently sold, renovated comparable homes nearby, adjust for differences, and average their prices or price per square foot, then apply that to your property.
How much will a lender lend based on ARV?
It varies by lender. Lend Private Money’s fix and flip and ground up construction loans are capped at 75% of ARV. Estimate yours with our hard money loan calculator.
What is the 70% rule?
A flipping rule of thumb: pay no more than about 70% of the ARV minus repair costs.
Related guides and tools: Hard money loan calculator · Hard money lending explained · Hard money lender in Florida
Know your ARV? Apply for a fix and flip loan.