What does ARV mean?
ARV is the projected market value of a home after every planned repair and renovation is finished. It is not the current as-is value, and it is not the asking price, it is what the finished house should sell for in the current market. See the glossary definition of ARV for the short version.
How do you calculate ARV?
Estimate ARV from at least three recent, nearby, comparable sales, then apply their price per square foot to your property. The closer and more recent the comparable, the more reliable the number. Use conservative comps, not the most optimistic one on the street. For example, if three renovated comps nearby sold for about $200 per square foot and your home is 1,500 square feet, your ARV estimate is roughly $300,000.
| Good comps are | Why |
|---|---|
| Within about half a mile | Same neighborhood pricing |
| Similar size and beds and baths | Comparable layout and value |
| Sold in the last 90 days | Reflects the current market |
| Fully renovated condition | Matches the after-repair state |
How do investors use ARV to make an offer?
ARV feeds the 70% rule: your maximum offer is roughly 70% of ARV minus repair costs, and wholesalers subtract their fee on top. That is how a single value estimate becomes a real offer number. For example, a $300,000 ARV with $40,000 in repairs gives 300,000 times 0.70 = $210,000, minus repairs = a $170,000 maximum allowable offer, and after a $10,000 wholesale fee your offer to the seller is $160,000. Run the math in our free ARV and wholesale calculator, and see the 70% rule and MAO explained for the full breakdown.
What mistakes throw off ARV?
The usual errors are using optimistic comps, ignoring condition differences, leaning on stale sales, and confusing as-is value with after-repair value. A few thousand dollars of wishful thinking on ARV can erase your entire margin, so anchor to closed comps and be conservative.