How to Calculate ARV (After Repair Value) For a Fix and Flip
If you’re diving into the world of fix and flip investing, one of the most important numbers you’ll need to master is ARV - After Repair Value.
ARV tells you what the property is likely to be worth after renovations are complete. It drives your profit projections, your renovation budget, and even how much a lender will finance
In this post, we’ll walk you through exactly how to calculate ARV, why it matters, and how Barnett REI Finance will help you fund smarter, more profitable deals.
What is ARV?
After Repair Value (ARV) is the estimated market value of a property after all planned renovations are complete. It’s based on comparable sales in the same area, commonly referred to as “comps.”
Why ARV Matters
ARV is the foundation for making informed decisions, including:
How much to offer on a property
What renovations are worth doing
Whether the deal will be profitable
How much financing you can get
Most lenders (including Barnett REI Finance) base your loan amount as a percentage of ARV, so getting this number right is essential.
How to Calculate ARV in 3 steps
Find Comparable Sales (“Comps”)
Sold within the past 3-6 months
Within a 0.5-1 mile radius
Similar in size, layout, and condition (post-renovation)
In the same school district or neighborhood
Use tools like Zillow, Redfin, or the MLS to find recent sales data. Be sure to only include homes that reflect what your property will look like after renovations.
2. Adjust for differences
No two homes are identical, so you’ll need to adjust:
Add value if your property will have more bedrooms, bathrooms, or square footage
Subtract value for features you’re missing, like a garage, finished basement, or newer roof
Consider intangible differences, like curb appeal or upgraded kitchens
If one comp sold for $400,000 and had a pool, and yours won’t, you might adjust your ARV down by $15,000-$20,000 depending on local trends
3. Calculate the Average
Once you have 3-5 good comps and adjust their values, average the final numbers
Example:
Comp 1 (adjusted): $385,000
Comp 2 (adjusted): $390,000
Comp 3 (adjusted): $395,000
Estimated ARV: $390,000
What ARV Means For Your Financing
More leverage to cover both purchase and rehab costs
Faster approvals when your ARV is clearly documented
More confidence when you’re competing with other buyers
By accurately estimating ARV, you’re not just protecting your bottom line, you’re setting yourself up for success with the right funding in place.
Final Thoughts
Understanding how to calculate ARV is a non-negotiable skill for any serious fix-and-flip investor. It’s your profit roadmap and a critical piece of your financing strategy.
Need funding for a deal with solid ARV?
Let Barnett REI Finance help you close quickly and confidently.
Apply today to get started on your next profitable flip.