ARV Calculator

After-repair value is an appraiser's or investor's estimate of what a property will sell for once a defined scope of renovation is finished, based on what comparable renovated properties in the same market area have actually sold for in the recent past. It is not the current as-is value, not the tax assessment, and not the seller's asking price. It is a forward-looking number anchored to backward-looking evidence.

Every other number in a fix-and-flip or BRRRR deal is derived from ARV. The maximum purchase price comes from ARV minus rehab minus profit. The refinance loan amount on a BRRRR comes from ARV times the lender's loan-to-value ceiling, typically 70% to 75% on a cash-out refinance. The hard money lender's initial loan and rehab draw schedule is usually capped as a percentage of ARV, commonly 65% to 75% combined loan-to-value. An investor who overstates ARV by even 8% to 10% can turn a profitable flip into a break-even or loss position, because that error compounds through the purchase price, the loan proceeds, and the exit price simultaneously.

Because so much rides on one estimate, professional investors triangulate ARV rather than trusting a single source. They pull comparable sales themselves from the MLS or a paid data service, they ask a local agent for a comparative market analysis, and on larger deals they order a full appraisal with an as-if-renovated value. When two or more of these methods converge within a few percentage points, confidence in the number rises; when they diverge sharply, that is the signal to walk away or renegotiate rather than force the deal to work on paper.

This calculator implements the comparable sales, price-per-square-foot method, which is the fastest and most widely used approach for single-family and small multifamily properties. It is not a substitute for an appraisal or a licensed agent's opinion, but it is the same basic math both of them start from, and it is precise enough to screen deals and negotiate purchase price with sellers and wholesalers.

The method has four steps: select comps, compute a price per square foot for each, adjust for condition and features, and apply the resulting rate to the subject property's square footage. Selecting good comps matters more than any formula. A comp is only useful if it sold within the last three to six months (or twelve in a slow-moving rural market), sits within a half mile to one mile of the subject, is within roughly 20% of the subject's square footage, has a similar bedroom and bathroom count, and was renovated to a similar finish level as the planned scope of work, not left dated or half-updated.

For each qualifying comp, divide its sale price by its square footage to get a price per square foot. A comp that sold for $302,000 at 1,520 square feet produced $198.68 per square foot. Do this for every comp, then average the results, or weight the average toward the comps that are closest in size, location, and condition to the subject. This calculator uses a simple average across all comps entered; sophisticated appraisers apply a weighted grid adjustment for each individual feature, but a simple average is a reasonable and defensible starting point for investor-level analysis.

Condition adjustment corrects for the fact that even fully renovated comps vary in finish quality. If the comps you are using were finished to a builder-grade standard and the subject's planned scope includes higher-end finishes that will realistically command a premium in that specific market, a positive adjustment of 2% to 5% is reasonable. If the comps are nicer than what your budget will actually produce, apply a negative adjustment of similar magnitude. Adjustments beyond plus or minus 8% to 10% usually signal that the comps are not truly comparable and better comps should be found instead of forcing a large adjustment.

Multiply the adjusted price per square foot by the subject property's square footage after renovation (using the same finished, above-grade square footage convention the comps used) to arrive at the estimated ARV. If the renovation scope adds square footage, such as finishing a basement or converting a garage, use the post-renovation square footage, and be conservative about how much of that added space the local market actually pays for on a per-square-foot basis, since below-grade and converted space rarely commands full above-grade pricing.

Worked example: three comps sold at $196.55, $198.68, and $194.93 per square foot, averaging $196.72. A planned renovation slightly below the comps' finish level justifies a negative 2% condition adjustment, producing an adjusted rate of $192.79 per square foot. Applied to a 1,450 square foot subject, the estimated ARV is $279,545, which this calculator would round and display alongside the offer calculations below.

The 70% rule is the fix-and-flip industry's standard shorthand for maximum purchase price: Maximum Allowable Offer (MAO) = (ARV × 0.70) − Estimated Rehab Cost. On a property with a $280,000 ARV and a $35,000 rehab budget, the rule allows a maximum offer of $196,000 − $35,000 = $161,000.

The 30% gap between ARV and the 70% ceiling is not arbitrary; it is built to cover the transaction costs and holding costs that do not show up as line items in a simple rehab budget, plus a baseline profit margin. In a typical US market, buying closing costs run 2% to 3% of purchase price, selling costs (agent commission plus seller-paid closing costs) run 8% to 10% of ARV, hard money financing costs (points plus interest over a typical 6 to 9 month hold) run 4% to 8% of the loan amount, and holding costs (insurance, utilities, property tax, HOA) add another 1% to 2% of ARV. Add those together and the 30% margin is largely consumed by cost before any profit is realized, which is exactly why disciplined investors do not negotiate the rule down to 75% or 80% just to win a bidding war.

The 70% rule is a screening heuristic, not a substitute for a line-item budget and profit target, and it performs worst at the extremes. On a $90,000 ARV property in a low-cost market, 30% of ARV is only $27,000, which may not cover fixed transaction costs at all, making the deal unworkable regardless of purchase price. On a $700,000 ARV property, 30% is $210,000, far more than actual costs and profit require, which means disciplined investors in higher-price markets often use 75% to 80% of ARV minus rehab instead, or better, build the calculation up from an actual target profit.

That is what the second output in this calculator provides: Maximum Offer at Desired Profit = ARV − Rehab Cost − Desired Profit. This method asks directly, after paying for the property and the renovation, how much profit do I need this deal to produce, and backs into the purchase price from there, which is more accurate than a flat percentage rule once you have real cost data from your own market and your own contractor.

Comparing the two outputs on every deal is a useful discipline. When the 70% rule and the profit-based calculation land close together, the deal is priced consistently with how the broader market underwrites flips. When they diverge sharply, it usually means either the rehab budget is unusually large or small relative to ARV, or the desired profit target is set unusually high or low relative to the standard 30% cushion, and it is worth understanding why before committing to an offer.

Using stale comps is the most frequent error. In a market moving 5% to 8% a year, a comp that closed nine months ago is already stale, and using it without a time adjustment systematically understates ARV in a rising market and overstates it in a falling one. Prefer comps under 90 days old whenever the market has enough sales volume to support it.

Comparing to unrenovated or partially renovated sales. If a comp needed work that the buyer priced into their offer, its price per square foot reflects a discounted, as-is condition, not a finished-renovation value, and including it in an ARV comp set pulls the average down and understates the true after-repair value.

Ignoring lot size, garage count, and layout differences that a simple price-per-square-foot calculation cannot capture. A comp on a double lot with a three-car garage will sell for more than its square footage alone suggests; using it unadjusted overstates the subject's ARV if the subject sits on a standard lot with a one-car garage.

Underestimating rehab cost, which inflates the calculated maximum offer just as much as overestimating ARV does. Contractor bids should be in hand, not guessed, before the MAO number is used to make a binding offer, and a 10% to 15% contingency should be added to any bid-based budget for unforeseen conditions, particularly in older housing stock with unknown electrical, plumbing, or structural issues behind walls.

Forgetting that the desired profit figure needs to reflect the actual risk and duration of the deal, not a fixed dollar habit carried over from a different market or price point. A $30,000 profit target that made sense on a $250,000 ARV flip is a thin 12% margin on a $250,000 deal but a fat 30% margin on a $100,000 deal; profit targets should be set as a percentage of ARV or of total cash invested, then converted to dollars for the specific deal.

Skipping the sanity check against an agent's opinion or a full appraisal before closing. A comparable sales calculation done from public records or MLS sheets is an excellent screening tool, but the final go or no-go decision on financing-sensitive deals should be confirmed by a local professional who can physically inspect the comps and the subject and account for factors a spreadsheet cannot see, such as a busy street, a poor floor plan, or a school district boundary line.

Hard money and private lenders that finance fix-and-flip deals typically size their loan as a combined percentage of purchase price and rehab cost, capped by a percentage of ARV, commonly expressed as up to 90% of purchase price plus 100% of rehab cost, not to exceed 70% to 75% of ARV. An investor whose deal clears the 70% rule on the purchase side will usually also clear the lender's ARV-based cap, which is another reason the rule remains popular even though it predates most of today's private lending programs.

In the BRRRR strategy (buy, rehab, rent, refinance, repeat), ARV determines the cash-out refinance amount at the back end. A conventional or DSCR cash-out refinance on an investment property typically allows 70% to 75% loan-to-value based on the new appraisal, which should track closely with the investor's own ARV estimate if the comps and math were sound. The gap between total cash invested (purchase plus rehab plus holding and closing costs) and the refinance proceeds is how much of the investor's original capital stays trapped in the deal, and a well-executed BRRRR aims to recover most or all of it, which only happens when the ARV estimate used at acquisition was accurate rather than optimistic.

Because appraisers for the cash-out refinance will use their own comps, often pulled several months after the investor's initial estimate, conservative ARV estimation at acquisition protects against a refinance appraisal that comes in lower than expected, which is one of the most common ways a BRRRR deal fails to return the investor's capital on schedule.

Retail buyers financing with a conventional mortgage will also trigger their own appraisal at resale, so the ARV estimate used to underwrite the flip should be defensible to a third-party appraiser using standard adjustment methodology, not just internally consistent. Investors who habitually push ARV estimates higher than an appraiser would support routinely see deals stall at the financing stage of the exit sale, forcing price reductions after the property is already listed and under contract.