How to Calculate ARV for Fix-and-Flip Deals

After-repair value is the ceiling on every flip number that matters: offer, loan, and profit. Rehab can be off by $8,000 and you still exit. ARV off by 10% and the 70% rule, the draw, and the listing price are all fiction.

ARV is what a retail buyer will pay for this house after you finish the scope you actually plan to fund — not as-is value, not the highest ask on Zillow, and not what the wholesaler put in the subject line.

This guide is the investor method that survives an appraisal: three to five sold comps, tight geography, honest adjustments, and a median — not a trophy. For the offer math that uses this number, see the 70% rule. For the rehab that has to match the comp photos, see how to estimate rehab costs.

Key stats at a glance

• Minimum comps: 3 sold; 4–5 is better
• Sale window: last 3–6 months (90 days is stronger)
• Distance: about 0.5 mile in cities and first-ring suburbs; farther only when rural
• Size band: generally within 15%–20% of subject living area
• Use: sold, renovated, same product type
• Avoid as ARV: actives, pendings, Zestimates, tax assessed value
• Lender use: ARV caps leverage, often 70%–75% of the appraised after-repair value

The definition that keeps you out of trouble

Term	Meaning
As-is value	What it would sell for today, in this condition
ARV	What it should sell for after your funded scope is done
List price	What a seller wants — not a comp
Appraised ARV	What the lender’s appraiser concludes after inspecting your scope

If your scope is a paint-and-LVP refresh, do not comp against a full-gut with an addition. ARV is matched to the finish you will deliver, not the finish you scrolled past on Instagram.

Step 1 — Pull the right sold comps

A usable comp is a house a buyer would have considered instead of yours after rehab.

Must match (in order):

1. Location — same neighborhood, subdivision, or school zone. Crossing a collector street, a rail line, or a municipal border is often a different market.
2. Property type — ranch vs two-story, brick two-flat vs single-family, condo vs house. Do not mix.
3. Gross living area — stay inside about 15%–20% unless you adjust carefully.
4. Bed / bath count — a 3/1 vs a 3/2 is a real dollar adjustment in most metros; see adding a bathroom.
5. Condition after rehab — sold already updated, or you are guessing at a discount.

Recency: last 90 days is ideal; last 6 months is acceptable if volume is thin. Older than that and you are mixing in a different rate environment.

Distance: half a mile is the urban/suburban default. In Chicago bungalow blocks and DC rowhouse squares, the next block can be a different buyer. Use the city guides when the micro-location matters: Chicago rehab costs and DC rehab costs.

Step 2 — Adjust, then take the median

Do not average a $410,000 trophy with two $335,000 normal sales and call ARV $360,000. Median first, then adjust.

Simple adjustment framework (illustrative — your market’s dollars differ):

Difference vs subject (after rehab)	Typical direction
+200 sq ft living area	Comp sold higher — adjust comp down
Extra full bath	Comp sold higher — adjust down
Finished basement (same GLA rules)	Often less than above-grade $/sq ft
Two-car garage vs one	Comp sold higher
Busy street vs interior lot	Comp sold lower — adjust up
Half-acre vs standard lot	Market-specific; do not invent

Worked set, subject will be a renovated 1,420 sq ft 3/2 ranch:

Comp	Sold	Dist.	Notes	Adjusted
A	$278,000	0.3 mi	1,400 sq ft, updated, 3/2	$278,000
B	$292,000	0.4 mi	1,580 sq ft, updated, 3/2	$284,000
C	$265,000	0.2 mi	1,390 sq ft, updated, 3/1	$272,000
D (active)	$305,000	0.3 mi	Not a sold — ignore for ARV	—
Median adjusted				$278,000

ARV = $278,000, not $292,000. You can list at $284,900. You cannot underwrite the loan to the hope.

Step 3 — Stress-test ARV like an appraiser will

Appraisers look for bracketing: at least one sold similar or slightly inferior, one similar or slightly superior. If every “comp” is a bigger house on a better street, expect a cut.

Questions that catch inflated ARV:

• Would this buyer also buy Comp A without a discount? If no, drop it.
• Did Comp B include a garage conversion or a permitted addition you will not have?
• Are you matching kitchen and bath quality in the listing photos? If comps show quartz and you budget laminate under $250k, you may still be fine — above that, see kitchen remodel: minor vs gut and bathroom finishes.
• How many days did the comps sit? 12-day sales support list-at-ARV. 70-day sales mean your hold number goes up even if ARV is right.

ARV vs the loan

Hard money and fix-and-flip loans typically take the lesser of loan-to-cost and a percentage of ARV. Inflated ARV does not raise the cap once the appraisal comes in. It only raises the offer you already signed.

Your ARV	Appraised ARV	70% ARV cap	Effect
$320,000	$320,000	$224,000	File as modeled
$320,000	$290,000	$203,000	$21,000 less leverage — cash or scope cut
$320,000	$270,000	$189,000	Deal often breaks

Build ARV so the appraisal can agree. That is the whole skill. Process overview: instant ARV estimate. Leverage mechanics: loan-to-cost.

Special cases that break naive ARV

Two-flats, condos, and manufactured

Product type is not a footnote. A renovated two-flat comps to two-flats. Manufactured housing comps to manufactured — see manufactured home ARV. Condo ARV dies on HOA special assessments and rental caps; pull those before you lock the number.

Additions and bath counts

A fourth bedroom or a second bath can move ARV only if sold comps in the same pocket already have it. Adding a bath to a 3/1 in a 3/2 neighborhood is often the highest-return add in the house — priced in adding a bathroom. Adding a bath no nearby sale has is a comfort upgrade, not an ARV unlock.

Luxury and unique houses

Over $600k, or anything with acreage, water, or historic constraints, three comps get scarce. Use more sales, wider time, and a conservative median. Trophy unique is where investor ARV and appraised ARV diverge most.

Wholesale packages

Marketing ARVs are a starting rumor. Rebuild the comp set yourself the same day you see the file. If you cannot find three sold renovated comps, you do not have an ARV. You have a wish.

Worked example: ARV drives MAO

Same 1,420 sq ft ranch. Rehab takeoff $58,000 + 15% = $66,700.

ARV used	70%	Minus rehab	MAO	Notes
$292,000 (best comp, unadjusted)	$204,400	$137,700	Inflated
$278,000 (median adjusted)	$194,600	$127,900	Use this
$265,000 (weakest sold)	$185,500	$118,800	Stress case

Offer against $127,900. If you need the $137,700 number to beat other buyers, you are buying the extra with your profit. Run both through the fix-and-flip calculator with holding costs included.

Common ARV mistakes

1. Using actives as comps — they have not sold
2. Crossing neighborhood lines for a prettier sale
3. Ignoring condition — a dated sale is an as-is clue, not an ARV comp
4. Price-per-square-foot only — baths, garages, and lots break PPSF
5. One great sale — that is a listing comparable, not a valuation
6. Assuming your “wow” kitchen creates a new comp set — it usually does not
7. Skipping the appraisal-bracket test — if you cannot find a sold at or below your ARV that looks like your finish, you are high
8. Locking ARV before the scope — a tub-to-shower decision can change who the buyer is; see tub-to-shower conversion

Field checklist (copy into your deal sheet)

1. Subject: address, GLA, beds/baths, lot, garage, basement
2. Scope in one line (cosmetic / mid / gut) so comps match finish
3. Five sold candidates; kill two that fail location or type
4. Adjust the remaining three; write the reason for each adjustment
5. Median = ARV
6. Note DOM and concessions on those sales (credits are real price cuts)
7. Screenshot listing photos of kitchen, baths, and floor — your scope must photograph in that family
8. Only then compute MAO

Related guides

• 70% rule and maximum allowable offer
• How to estimate rehab costs
• Fix-and-flip holding costs
• Average fix-and-flip rehab costs
• Instant ARV estimate
• Adding a bathroom: cost vs ARV

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Jaken Finance Group underwrites fix-and-flip loans to a defensible after-repair value and a funded scope — not a marketing ARV.

Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. All loans are subject to full underwriting for loan approvals. Jaken Finance Group only finances non-owner occupied investment properties.

How to Calculate ARV — next step (2026)

Set ARV from the median sold comp, then write the offer — the appraisal will not adopt your favorite sale.

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