Property fundamentals
ARV (After-Repair Value)
What the property would sell for once rehab is complete. The most important — and most-mis-estimated — input in any BRRRR or flip.
Example
A $80,000 distressed property with $30,000 of rehab and an ARV of $150,000 has equity creation of $40,000 ($150k − $80k − $30k).
Why ARV (After-Repair Value) matters
ARV is where most BRRRR plans fall apart. Investors plan for the optimistic ARV; appraisers often come in 3-7% lower. Build a 5% ARV haircut into your underwrite for safety.