ARV in real estate means after repair value — the realistic resale value of a property after the work you plan to do, when it is finished to a quality that truly matches the best nearby sold comps. It is a forward, project-specific number, not the list price, not the tax assessment, and not a “Zestimate with hope.”
You use ARV to size offers, margin, and (for wholesalers) whether an end buyer can still make money after your fee. The sections below: the working definition, a formula box, a worked numeric example, the mistakes that break deals, and only then how to use a public deal list as a first screen.
The definition investors use on a real deal
Short version: if you complete the planned scope, and a retail or exit buyer compares your product to similar recent sales, what is a defensible top of the value band? Wholesale buyers need room for the 70% rule (or a tighter rule) to work; BRRR investors use ARV to bound refinance. Same idea, different exit stress test.
ARV in one box (then you prove it with comps)
Core relationship (conceptual)
ARV = exit price implied by comparable, already-sold homes in similar location, size, and finished condition
You do not “calculate ARV” from a single formula like gas mileage — you support a number with a comp set, adjustments, and honesty about your deliverable finish.
How to build ARV without hand-waving
- Pick the comp set honestly. Same sub-market, same bed/bath class, similar story on updates. Reject the one cherry-picked high sale.
- Match finish to the plan.If you are not delivering that kitchen and bath, your ARV is not the comp's number.
- Reconcile to a range. Tighten to a defensible single ARV for underwriting, usually toward the conservative side of the range when you are not sure.
- Revisit for time. Stale comps in a fast market are a silent bug. When you use a public feed to find deals (like /deals), the opportunity may be new — the comps you cite still have to be current.
Worked example with numbers (illustrative, rounded)
Say your sub-market for clean, updated 3/2s has sold between $320k and $345k in the last 90 days after normal marketing time. You walk the subject and it needs real kitchen and bath, but nothing structural. If your scope truly lands in the middle of that band when done:
- Start with a range from comps: $320k–$345k, not a single Zillow number.
- Drop any outlier at $365k that had twice your lot size or a full second story you are not building.
- Pick a conservative ARV for underwriting: e.g. $330k (near the bottom of the real band) if you want margin for time and surprise.
- Pair with a repair estimate (get real bids as you get serious) — say you believe $45k hard cost for the scope.
- Now you can run a 70% rule pass: 0.70 × $330k = $231k, minus $45k = $186k ballpark conversation piece for a max purchase/assignment envelope — before soft costs, your fee, and what your buyer actually needs. The point is the chain: comps → ARV range → one chosen ARV → repairs → rule or full budget.
Common ARV mistakes (the ones that cost real money)
- Using the highest comp “because the market is hot.” Hot markets still punish sloppy finish and over-improvement.
- Confusing as-is value with ARV. As-is is today; ARV is after the work you will actually do.
- Ignoring time to sell at that price. If your ARV needs 120 days on market and your hard-money clock is 90, your effective exit is not the comp peak.
- Borrowing a wholesaler’s ARV without re-comping. Treat anyone else’s number as a lead, not a finding.
- Forgetting that ARV is not profit. It is a top line; spread, interest, sell-side costs, and your fee all sit below it.
Using OffMarket Deck after you know how to comp
On deal rows where we show ARV, repair, or rent language, treat it as a starting point for triage — not a replacement for your comp set. If you are screening flips, open fix & flip in Texas, Florida, or Houston or Miami and shortlist in the markets you can underwrite credibly. Same workflow as a mailer lead, but with filters and one place to sort.
Related
Next step on offers: the 70% rule for a back-of-napkin screen, and wholesaling for beginners if you are pricing a contract assignment, not holding a rehab.
FAQ
Is ARV the same as “market value”?
“Market value” is often defined as a specific appraisal concept. ARV is your project-specific, forward-looking view after your scope — for underwriting, not for tax appeals.
Can I use ARV for land?
Land is different; see the land strategy view for context on exit paths that are not a standard SFR retail resale.