What Is ARV (After-Repair Value)?
Direct answer
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.
Worked example: conservative ARV from comps
| Renovated comp 1 sold | $248,000 |
|---|---|
| Renovated comp 2 sold | $255,000 |
| Renovated comp 3 sold | $262,000 |
| Conservative ARV used for underwriting | $250,000 |
Use $250,000 as the working ARV, then run max-bid and rehab math from that number.
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.