What Is ARV (After-Repair Value)?
ARV, or after-repair value, is the estimated market value of a property once all planned renovations are complete. It's the single most important number in a distressed deal: your maximum bid, rehab budget, and projected ROI all work backward from ARV. Get it wrong and every other number is wrong.
How to estimate ARV
Pull 3–5 recent sales of comparable properties — similar size, condition, and location (ideally within half a mile and the last six months) — that reflect the finished condition you're targeting. Use the conservative end of that range. ARV is about what fully-renovated comps actually sold for, not list prices or optimistic projections.
Why ARV drives the deal
The 70% rule and most max-bid formulas start from ARV: maximum offer ≈ ARV × your target percentage − rehab − costs. If ARV is inflated by 10%, your 'safe' offer can wipe out the entire profit margin. That's why disciplined investors underwrite ARV first and bid second.
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Frequently asked questions
- What's the difference between ARV and current value?
- Current (as-is) value is what the property is worth today in its distressed condition; ARV is what it will be worth after repairs. The spread between them, minus rehab and costs, is your potential profit.