After-Repair Value (ARV) is the most important number in a flip or BRRRR underwrite. Get it wrong by 5% and you eat your profit. Get it wrong by 10% and you lose money. Here is how experienced investors pin ARV down — and how lenders cross-check it.
What ARV Actually Means
ARV is what your property will sell for after you finish the rehab. Not list price — sale price. Not today's condition — finished condition. It is a forward-looking estimate rooted in what similar, completed properties have actually closed for in the recent past.
The Comp Framework
Pull 3–5 sold comparables that match your property on as many of these dimensions as possible:
- Distance (ideally within 0.5 miles; never beyond 1 mile)
- Sold within the last 90 days (180 max)
- Same bed/bath count
- Similar square footage (within 15%)
- Same finish level (your finished kitchen vs. their finished kitchen)
- Same structural style (rowhome vs. detached, 2-story vs. 3-story)
Adjust for material differences: garage, finished basement, lot size, major view premium, etc. Stay conservative — it is better to err low on ARV than high.
Where Most Investors Go Wrong
1. Using list prices, not sold prices
Active listings tell you what sellers hope to get, not what buyers will pay. Only sold comps matter.
2. Reaching for comps that don't match finish
If your rehab delivers LVP and quartz, don't compare to a house with hardwood and marble — or to builder-grade laminate. Same finish level only.
3. Ignoring days-on-market trends
If finished comps are sitting 60+ days, your ARV estimate needs a haircut. Fast-selling markets support ARV; slow markets erode it.
4. Adjusting optimistically for unique features
"My finished basement adds $30K" — maybe, maybe not. Let the comps tell you, not your optimism.
How Lenders Verify
A bridge lender will run their own ARV as part of underwriting. Expect:
- A full appraisal with "subject to repairs" valuation
- Independent desktop review of your comps
- Sometimes a BPO (broker price opinion) as a sanity check
Lender ARV is often 3–5% more conservative than investor ARV. If your number is meaningfully above the lender's, your loan amount gets trimmed — or declined.
Pro Tip
Before submitting a bridge loan, run your own "lender-style" ARV: take your average comp, then subtract 3–5%. If your deal still works at that number, submit confidently.
ARV for BRRRR vs. Flip
For flips, ARV is sale price. For BRRRR, ARV is refinance appraised value — usually slightly lower than flip ARV because appraisers are trained conservatively. Use 95–97% of your flip-style ARV when underwriting a BRRRR refinance.
Bottom Line
ARV is an estimate grounded in evidence. Pull comps, adjust honestly, stay conservative, and verify before every submission. Your profit depends on it.
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