What Is ARV and Why Every Real Estate Investor Needs to Know It
After Repair Value — or ARV — is the estimated market value of a property after all renovations and repairs have been completed. It's the number that determines whether a deal makes money or loses it.
For flippers, wholesalers, and BRRRR investors alike, ARV is the foundation of every investment decision. Get it wrong, and your entire deal falls apart.
How ARV Is Calculated
ARV is determined by analyzing comparable sales (comps) — recently sold properties in the same area that are similar in size, condition, and features to what your property will look like after renovation.
The basic formula:
ARV = Weighted Average of Comparable Sold Prices
But not all comps are created equal. The best ARV calculations weight comps based on:
- Proximity — Closer is better. Ideally within 0.5 miles
- Recency — Sold within the last 6 months carries more weight than 12 months ago
- Similarity — Matching bed/bath count, square footage within 20%, and similar lot size
- Condition — Updated comps reflect post-renovation value more accurately
Why Most Investors Get ARV Wrong
The most common mistakes investors make with ARV:
- Using active listings instead of sold comps — asking price isn't market value
- Cherry-picking the highest comp to justify a deal they want to work
- Ignoring days on market — a comp that sat for 180 days signals a soft market
- Using comps from different neighborhoods or school districts
- Not adjusting for significant differences in square footage or lot size
The 70% Rule and ARV
Most investors use the 70% rule as a quick filter:
Maximum Offer = (ARV × 70%) − Repair Costs
So if a property has an ARV of $300,000 and needs $50,000 in repairs:
$300,000 × 0.70 = $210,000 − $50,000 = $160,000 maximum offer
This leaves room for closing costs, holding costs, and profit. More sophisticated investors use MAO (Maximum Allowable Offer) calculations that break these costs out individually.
How ARV Analyzer Calculates ARV
ARV Analyzer pulls sold comps from multiple data sources, scores each comp by distance, recency, and similarity, then calculates a weighted median with a confidence score from 0-100.
This gives you not just a number, but a measure of how reliable that number is — something spreadsheets and gut feelings can't provide.
Key Takeaways
- ARV is the projected value of a property after repairs — it drives every deal decision
- Always use sold comps, not active listings
- Weight comps by proximity, recency, and similarity
- Use the 70% rule as a starting filter, then refine with detailed MAO calculations
- A confidence score tells you how much to trust your ARV estimate