ARV, or after-repair value, is the estimated market price of a property once all planned renovations are finished. Lenders and investors use it to judge whether a flip makes sense and how much financing a deal can reasonably support.
You'll see ARV on nearly every deal sheet. It's the first number most lenders check when you apply for fix and flip loans, and it's the number your whole profit plan rests on. Get it right and your budget, timeline, and exit all line up. Get it wrong and a promising flip can turn into a tight one.
This guide explains what ARV means, how it's calculated, and how to use it before you commit to a deal.
ARV is what a renovated property should sell for in its local market. It isn't the purchase price and it isn't the property's current value. It's a forward-looking estimate based on what similar, fully updated homes in the area have recently sold for.
Here's a simple way to think about it. You buy a dated three-bedroom home that needs work. As-is, it's worth one number. After you update the kitchen, bathrooms, flooring, and curb appeal, buyers will compare it to other updated homes nearby. That second number is your ARV.
Keep two things in mind:
Lenders calculate ARV by comparing your property to recently sold, renovated homes nearby. These are called comparable sales, or "comps." The goal is to find homes that look like what yours will be after the work is done.
Good comps usually share these traits:
From there, the lender adjusts for differences. If a comp has an extra bathroom or a bigger lot, the estimate shifts up or down to account for it. Your renovation plan matters too, since the lender needs to see what the finished property will look like.
Asset-based products such as hard money fix and flip loans lean heavily on this analysis. Because the loan is secured by the property, the property's potential carries more weight than your personal income.
A few habits will make your own ARV more reliable:
ARV helps determine how much a lender is willing to fund, because it shows what the property could be worth when the project is done. A higher, well-supported ARV relative to your costs gives a lender more confidence in the deal.
Lenders usually look at your numbers from two angles:
Together, these show whether there's enough room between your costs and the finished value for the deal to hold up if something goes sideways. A deal with a healthy gap between total cost and ARV looks stronger than one where the numbers are tight.
This is why the same loan request can get different outcomes on different properties. Two investors might want the same loan amount, but the one buying below the neighborhood's renovated value, with a clear scope of work, will usually be in a better position.
For anyone looking at fix and flip financing for the first time, the takeaway is simple: the loan isn't based on how much you want to borrow. It's based on what the deal supports.
You should compare ARV against your total project cost, not just the purchase price and renovation budget. Many flips lose their margin on the costs investors forget to include.
Here's what belongs in your cost picture:
Add these up, then compare the total to your ARV. The gap between them is your potential profit margin. If that gap looks thin on paper, it will likely feel even thinner once real life shows up.
A common guideline is the "70% rule," which suggests keeping your purchase price plus repair costs at or below roughly 70% of ARV. Treat it as a quick screening tool, not a law. Strong local markets may support tighter margins, while uncertain ones may call for more room.
To use ARV well, build it from the ground up, stress-test it, and compare it with your full costs before you make an offer. Here's a practical process you can follow on any deal.
Once your numbers hold up, it helps to get a second opinion. Many investors ask private lenders for fix and flip deals to review their ARV and budget early, since a lender's view of the property can reveal blind spots you might have missed.
We're an asset-based lender, which means we look at the deal itself rather than your personal income. You don't need to provide W-2s or tax returns. We focus on the property, the renovation plan, and the numbers behind them.
When you share a deal with us, we look at three things:
As a fix and flip lender, we use ARV to see whether your renovation plan makes financial sense. Your final loan amount depends on the property, your purchase price, your renovation budget, ARV, loan-to-cost, and your experience as a borrower. We can finance up to 95% of the total project cost, purchase and renovation combined, and renovation funds are released through a draw schedule as the work progresses.
Getting started is quick. You share the property address, purchase price, estimated renovation costs, and projected ARV. It takes under five minutes, and no financial documents are needed at that stage.
ARV stands for after-repair value. It's the estimated market value of a property after all planned renovations are complete.
Market value is what a property is worth today in its current condition. ARV is what it should be worth after the renovation is finished.
Investors, lenders, appraisers, and real estate agents can all estimate ARV, usually by comparing recent sales of similar renovated homes nearby. Lenders will form their own view of the number.
Yes. Market conditions, scope changes, and cost overruns can all affect your final results. That's why a conservative estimate is safer than an optimistic one.
Absolutely. Whether it's your first flip or your fiftieth, ARV is the foundation of your budget, your loan request, and your profit plan.
ARV tells you what your finished property could be worth, and everything else in your flip is measured against it. Build it from solid comps, stress-test it with conservative assumptions, and compare it to your complete cost picture. A deal that still works under cautious numbers is one you can move on with confidence.