ARV — After Repair Value — is the single most important number in a fix & flip. It’s what the property will be worth after your renovations are done, and it drives everything: how much a lender will fund, how much you should offer, and whether the deal actually makes money. Here’s how to calculate it and use it.
What ARV actually means
ARV is your best estimate of the property’s market value once the rehab is complete — not what it’s worth today in its current condition. Lenders lean on ARV because a fix & flip loan is really a bet on the finished product: they’ll typically lend up to a percentage of ARV (often around 70–75%), so getting this number right matters as much to them as it does to you.
How to calculate ARV, step by step
1. Pull comparable sales (“comps”).
Find 3–5 properties that recently sold (not listed — sold) in the same area, similar in size, bedrooms/baths, and style, ideally within the last 3–6 months and within about a mile. You want renovated comps — homes in the finished condition yours will be in.
2. Find the price per square foot.
For each comp, divide its sale price by its square footage.
Example: a comp sold for $300,000 at 1,500 sq ft = $200/sq ft.
3. Average the comps and apply it to your property.
Average the price-per-square-foot across your comps, then multiply by your property’s square footage.
Example: comps average $200/sq ft. Your property is 1,600 sq ft.
ARV ≈ $200 × 1,600 = $320,000.
Adjust up or down for meaningful differences (an extra bathroom, a garage, a bigger lot, a better block).
The 70% rule — how investors use ARV to protect profit
Once you have ARV, a common guardrail is the 70% rule:
Maximum offer = (ARV × 70%) − estimated repair costs
Example: ARV of $320,000, repairs of $50,000.
Max offer = ($320,000 × 0.70) − $50,000 = $174,000.
That 30% cushion is meant to cover your financing costs, holding costs, closing costs, and profit. Some investors flex to 75% in hot markets or 65% to be conservative — the point is to build your margin in on the buy.
How ARV affects your loan
Because most fix & flip lenders size the loan against ARV, a solid, defensible ARV (backed by real comps) can mean more leverage and a smoother approval. A shaky ARV — or comps that don’t hold up — is one of the most common reasons a deal gets repriced or falls through. It pays to get this right before you make an offer. (See how our Fix & Flip Loans are structured around purchase price, rehab, and ARV.)
Run your numbers, then let us run the financing
Nail your ARV and your buy, and the next question is who funds it on the best terms. As a private money broker, CapPro shops your fix & flip across our network of lenders so you get competitive leverage and a fast close — without calling around yourself.
Submit your deal or call (856) 208-7745 and we’ll get you terms built for investors.
