After Repair Value (ARV) Calculator

What After Repair Value Means for Real Estate Investors

After repair value is the estimated market value of a property after all planned renovations and repairs are complete. ARV is the foundation of every fix-and-flip analysis and BRRRR strategy because it determines how much the property will be worth once the work is done. Without a reliable ARV, investors cannot calculate maximum offer price, projected profit, or refinance potential.

ARV is most commonly estimated using comparable sales, which are recently sold properties in the same area with similar size, condition, and features to what the subject property will look like after renovation. The price-per-square-foot method takes the average sale price per square foot from comparable properties and multiplies it by the subject property's square footage to produce the ARV estimate.

How to Use Comparable Sales for ARV

The most reliable ARV estimates come from comparable sales that closely match the subject property's post-renovation condition. Look for properties that sold within the last 3 to 6 months, are within a half mile of the subject property, have similar square footage (within 20%), and match the intended finish level of the renovation.

Enter each comp's sale price and square footage into this calculator. The tool calculates the price per square foot for each comp, averages them, and applies that average to the subject property's square footage. Using at least two comps produces a more reliable estimate than relying on a single data point. If you already have a confident ARV from a broker opinion or appraisal, use the manual override field instead.

The 70% Rule Explained

The 70% rule is a quick screening formula used by fix-and-flip investors to determine the maximum purchase price that leaves enough margin for profit. The formula is: Maximum Offer = ARV multiplied by 70%, minus repair costs. The remaining 30% of ARV is intended to cover holding costs, selling costs, and profit.

For example, if the ARV is $240,000 and repairs cost $45,000, the 70% rule max offer is $240,000 times 0.70 minus $45,000, which equals $123,000. If the purchase price is above this number, the deal has tighter margins and less room for error. The 70% rule is a guideline, not a hard rule. Experienced investors adjust the percentage based on market conditions, rehab complexity, and their own risk tolerance.

Understanding the Profit Analysis

This calculator computes projected profit by subtracting total investment and selling costs from the ARV. Total investment includes the purchase price, repair budget, and holding costs such as loan interest, insurance, utilities, and property taxes during the renovation period. Selling costs are expressed as a percentage of ARV and typically include agent commissions (5 to 6%), closing costs (1 to 2%), and transfer taxes.

Return on investment divides the projected profit by the total investment. Most experienced flippers target a minimum ROI of 15 to 20% to account for the risk and effort involved. Deals with ROI below 10% leave very little cushion for cost overruns, market shifts, or extended holding periods.

Equity Created and the BRRRR Strategy

Equity created is the difference between the ARV and the purchase price. This metric is especially important for BRRRR investors (Buy, Rehab, Rent, Refinance, Repeat) because the amount of equity created determines how much capital can be recovered through a cash-out refinance after the renovation is complete.

If a property is purchased for $150,000 and the ARV is $240,000, the investor creates $90,000 in equity through the purchase and renovation. At a 75% loan-to-value refinance, the investor could borrow $180,000 against the property, recovering more than the original purchase price and potentially all of the repair costs as well. The equity percentage shown in this calculator helps investors quickly assess refinance potential.

Frequently Asked Questions

How many comps should I use to estimate ARV?

Use at least two to three comparable sales for a reliable estimate. More comps produce a more stable average. Focus on properties that match the subject's post-renovation condition, size, and location rather than using a large number of loosely similar sales.

What is the 70% rule in house flipping?

The 70% rule states that an investor should pay no more than 70% of the ARV minus repair costs. The remaining 30% covers holding costs, selling costs, and profit. It is a screening guideline, not a guarantee of profitability.

What costs should I include in holding costs?

Holding costs include loan interest or hard money payments, property taxes during the hold period, insurance, utilities, and any HOA fees. For a typical 3 to 6 month rehab, holding costs often range from $3,000 to $10,000 depending on the property and financing terms.

What percentage should I use for selling costs?

A common estimate is 8 to 10 percent of the sale price. This covers agent commissions (5 to 6%), buyer and seller closing costs (1 to 2%), title fees, and transfer taxes. Adjust based on your local market and whether you plan to use an agent.

Can I use this calculator for BRRRR deals?

Yes. The ARV and equity created metrics are directly applicable to BRRRR analysis. The equity created shows how much value the rehab adds, which determines how much you can pull out through a cash-out refinance at 70 to 80 percent LTV.

What if my purchase price exceeds the 70% rule?

Deals above the 70% rule can still be profitable but carry more risk. Check the profit analysis section for the actual projected return. In competitive markets, many investors work with tighter margins of 75 to 80 percent of ARV minus repairs, accepting lower profit per deal in exchange for deal volume.