ARV (After Repair Value)
The estimated value of a property after renovations are complete.
Definition
After Repair Value is what a property will be worth after all improvements are made. It's a critical number for flippers and BRRRR investors because it determines potential profit and refinance proceeds.
How to Estimate ARV
- Find comparable sales (comps) of recently sold, renovated properties
- Match square footage, bedrooms, bathrooms, and location
- Adjust for differences in condition and features
- Consider current market trends
Common Mistakes
- Using asking prices instead of sold prices
- Comparing to properties in better locations
- Over-estimating the impact of improvements
- Ignoring market conditions and timing
ARV in Different Strategies
- Flipping — ARV determines your sale price and profit margin
- BRRRR — ARV determines refinance proceeds and equity position