What is ARV?
ARV — after-repair value — is what the property would sell for once the rehab is complete: the price a fully renovated version of your house would trade for today, in that neighborhood, to a normal buyer with normal financing. It is the most important, and most mis-estimated, input in any flip or BRRRR. Two things follow from the definition. First, ARV is not purchase price plus rehab budget — the market decides what a finished house is worth, not your invoices. Second, ARV is a forecast of an appraisal: on a refinance, a licensed appraiser will pull renovated comparable sales and reconcile them to a value, and your job is to run the same play before you commit money to the deal.
The formula
That one-liner is the last step of the process, not the process itself. The accuracy lives in which comps you select and how you adjust them — which is why this calculator asks for the comps, not for a guess.
The comps method, step by step
The method is the same one the appraiser will use after your rehab, run in advance:
- Pull renovated sales only. Closed sales within roughly half a mile, sold in the last 3–6 months, same property type, within about 20% of your square footage — and renovated to the condition you're delivering. A dated sale tells you what the house is worth now, which is a different question.
- Demand at least three comps, prefer five. With fewer than three true comps, widen the radius or time window before you loosen the renovated-condition filter.
- Compute price per square foot for each comp (the calculator does this for you).
- Adjust for real differences — beds, baths, garage, lot, condition. Adjust the comp's sale price toward your subject before entering it: if a comp has one fewer bath than your finished product and second baths are worth ~$7,500 in your market, add that to the comp's price first.
- Reconcile and sanity-check. Average the $/sq ft, multiply by your finished square footage, and confirm the result sits inside the range the comps actually sold in. An ARV above every comp's actual sale price should make you deeply suspicious — the calculator flags this automatically.
The full walk-through — including the adjustment discipline and what to do when comps are thin — is in our guide on how to calculate ARV.
A worked example
Take the deal from that guide: a dated 3-bed, 2-bath single-family, 1,400 finished square feet, needing roughly $45,000 of work to reach the neighborhood's renovated standard. The four best renovated comps:
| Comp | Sq ft | Sale price | $/sq ft |
|---|---|---|---|
| A — 0.3 mi, sold 6 wks ago | 1,450 | $262,000 | $180.69 |
| B — 0.4 mi, sold 2 mo ago | 1,350 | $248,500 | $184.07 |
| C — 0.2 mi, sold 3 mo ago | 1,500 | $270,000 | $180.00 |
| D — 0.5 mi, sold 5 wks ago | 1,380 | $255,300 | $185.00 |
The four comps average $182.44 per square foot. Applied to 1,400 finished square feet: 1,400 × $182.44 ≈ $255,400 — round conservatively and call the ARV $255,000, a number that sits comfortably inside the comps' $248,500–$270,000 sale range. The calculator above is preloaded with the first three of those comps and lands at ≈$254,200 — within half a percent of the four-comp answer. That stability across comp subsets is exactly what a healthy comp set looks like; when dropping one comp swings your ARV by $10,000 or more, the set is too thin to trust, and the fix is better comps, not bigger adjustments.
The 70% rule: turning ARV into a max offer
ARV's first job is setting the most you can pay and still leave room to profit — the maximum allowable offer:
The 30% you hold back isn't profit — it's profit plus every cost the formula doesn't name: buying costs on the purchase, holding costs for every month you own it, and selling costs that land on the higher finished value, not on your bargain purchase price. On a typical deal those three eat roughly 12–14% of ARV and your profit is the remaining 16–17%. The full ledger — where every dollar of the spread goes on a real flip — is worked through in our 70% rule deep-dive.
When the 70% rule lies
The single biggest mistake with the rule is treating the 70 as a law of physics. It encodes a specific bundle of cost-and-profit assumptions, and when those don't hold, the multiplier should move:
| Situation | Why it breaks | Multiplier |
|---|---|---|
| Cheap houses (ARV < ~$150k) | Fixed costs are a big share of a small spread | 60–65% |
| Typical deal ($200k–$400k) | The rule's home turf | 70% |
| Long or heavy rehab (9+ months) | Holding costs balloon | drop 3–5 pts |
| Expensive house, light rehab | Fat spread; costs are a small share | 72–75% |
That's why the multiplier in this calculator is an input, not a constant. And it's why the rule is a screen, not underwriting: use it to decide which listings are worth an hour, then solve the offer backward from your real costs and required profit before you sign. The other input matters just as much — build the repair number line by line with the rehab cost estimator rather than guessing a round number, and add a 10–25% contingency for what demolition reveals.
The BRRRR tie-in: the 75% refinance
Buy-and-hold investors use the same ARV with a different destination. On a BRRRR, you refinance the finished rental instead of selling it, and a cash-out refinance on a single-family investment property typically tops out around 75% of appraised value in 2026 — that's the “75% LTV refi loan” line in the calculator. On the worked deal: negotiate to $150,000, spend the $45,000 rehab, carry $8,000 of closing and holding costs — $203,000 all-in. A 75% refinance against the $255,000 appraisal produces a $191,250 loan; net of about $4,000 in refi costs you recover $187,250, leaving just $15,750 of your cash in a stabilized rental. The roughly five-point gap between the 70% you paid and the 75% you can refinance is the room the transaction costs need — model the whole cycle in the BRRRR calculator.
One caution before you count on that refinance: the appraisal is the referee's call, and appraisers often come in 3–7% below an investor's ARV. A 10% miss more than doubles the cash trapped in this BRRRR and cuts the equivalent flip's profit by roughly three quarters — which is why disciplined investors underwrite at their comp-supported number and confirm the deal still works 5–10% below it.
Mistakes that sink ARV estimates
1. Comping against unrenovated sales
Mixing dated sales into the set drags the $/sq ft down — or worse, tempts you to “adjust up” by guesswork. Renovated comps only; that's the entire point of the exercise.
2. Using list prices instead of closed sales
Anyone can ask anything. Only closed prices are evidence, and in a softening market even 6-month-old closings can be stale.
3. Ignoring the neighborhood ceiling
If the nicest renovated homes on the street top out around $310,000, no kitchen you install makes yours worth $340,000. You cannot renovate a house above what the block supports.
4. Letting the deal set the ARV
If you catch yourself hunting for one more comp to justify the price that makes the deal work, stop — the comps are supposed to discipline the offer, not the other way around.
When to use this calculator
Use it the moment a distressed listing catches your eye: three comps and a square footage produce the two numbers that decide whether the deal deserves another hour — the ARV and the max offer. When a property clears the screen and the endgame is a rental, run the stabilized numbers through the full TrueCap analyzer — its Max Offer card solves the rental version of this question (the highest price that still hits your target cap rate, cash-on-cash, and DSCR), alongside cash flow, 10-year projections, and a plain-English verdict. None of this is investment advice; verify comps, rehab scope, and lender terms on any specific deal.
Frequently asked questions
What is ARV in real estate?+
ARV (after-repair value) is what the property would sell for — or appraise at — once the rehab is complete. It's the most important, and most mis-estimated, input in any BRRRR or flip: the max offer keys off it, the refinance loan is sized as a percentage of it, and the flip profit is whatever's left of it after costs. It is a forecast of an appraisal, not a formula, which is why it comes from renovated comparable sales rather than from your rehab budget.
How do you calculate ARV?+
Pull 3–6 recently sold comps that are already renovated to the level you're planning — ideally sold in the last 3–6 months, within about half a mile, and within roughly 20% of your square footage. Compute each comp's price per square foot, adjust for meaningful differences (beds, baths, garage, condition), then multiply the average $/sq ft by your property's finished square footage. Finally, sanity-check that the answer sits inside the range the comps actually sold in — this calculator runs that check automatically.
What is the 70% rule?+
A rule of thumb that caps your purchase offer at 70% of ARV minus the cost of repairs. On a house that will be worth $300,000 renovated and needs $45,000 of work, the maximum offer is (0.70 × $300,000) − $45,000 = $165,000. The 30% you hold back isn't all profit — it covers buying, holding, and selling costs first, and whatever is left is your margin.
Is ARV just the purchase price plus the rehab budget?+
No — that's the single most common ARV mistake. Spending $45,000 on a renovation doesn't add $45,000 of value; it might add $70,000 in a neighborhood that rewards renovated product, or $25,000 in one already priced near its ceiling. The market decides what the finished house is worth, not your invoices, which is why ARV comes from renovated comps and nothing else.
Can I use a Zestimate or online estimate as my ARV?+
No. Automated estimates price the property in its current condition and blend renovated and unrenovated sales indiscriminately — which is exactly the distinction ARV exists to capture. Use online tools to find candidate comps quickly, then do the renovated-only, adjusted comp work yourself, or ask an investor-friendly agent to pull MLS comps.
Does the 70% rule work for BRRRR?+
Yes, with a twist. BRRRR investors refinance instead of selling, and a cash-out refinance on a single-family investment property typically maxes out at 75% of the appraised value in 2026. Keeping purchase-plus-rehab at or under 70% of ARV leaves roughly a five-point cushion for closing and holding costs, so a 75% refinance can return most or all of your invested cash. If the finished property won't cash-flow as a rental, though, it isn't a BRRRR — check cap rate and DSCR first.
When is 70% the wrong number?+
Whenever the costs the 70 encodes don't match your deal. On cheap houses (ARV under roughly $150k), fixed costs eat a big share of a small spread — use 60–65%. On long or heavy rehabs, holding costs balloon — drop the multiplier 3–5 points. On expensive houses with light work, 72–75% can be justified. Treat 70% as the center of a range and adjust the multiplier in this calculator to match your actual costs.