How to Calculate ARV for a House Flip
If you're serious about flipping houses, one number will make or break your deal analysis before you ever swing a hammer: after-repair value. Knowing how to calculate ARV for a house flip is the difference between a profitable renovation and a project that quietly eats your margin.
What is ARV in a house flip?
ARV stands for after-repair value: the estimated market value of a property once planned renovations are fully complete — not what the house is worth today in its current, often distressed, condition.
- It caps your offer price — most flippers work backward from ARV using a formula like the 70% rule.
- It defines your profit ceiling — projected profit is ARV minus purchase price, renovation, holding, and selling costs.
- It determines your loan amount — fix-and-flip lenders typically lend a percentage of ARV rather than just purchase price.
The comparable sales (comps) approach
The industry-standard way to estimate ARV is the comparable sales approach — the same core method licensed appraisers use. Find other properties that have already sold in finished, renovated condition, and use their sale prices to estimate what your property will be worth once your rehab is done. This works because buyers and appraisers value a property relative to what similar, recently sold homes actually fetched — not on what a seller hopes it's worth.
How to calculate ARV.
Define the post-renovation profile
Nail down exact square footage, bed/bath count, and finish level you plan to deliver after the rehab.
Pull recently sold comps
3–5 properties sold in the last 3–6 months, within roughly a half-mile to one mile, similar in size and style.
Calculate price per sq ft
Divide each comp's sale price by its finished square footage.
Adjust each comp
Adjust up or down for lot size, parking, updated systems, finish quality, and unique features.
Average the adjusted figures
Gives you a blended, market-supported price per square foot for the neighborhood.
Apply to your subject property
Multiply the average adjusted price per sq ft by your property's finished square footage.
Sanity-check the result against the highest verified sale prices in the immediate area over the past 6–12 months. If your number sits well above anything that's actually sold nearby, treat that as a warning sign rather than an opportunity.
A worked example (illustrative only)
The numbers below are made up for demonstration purposes only and don't reflect any specific property or market. Suppose four comps, all sold within the last four months, all renovated to a similar finish level, come out to adjusted price-per-square-foot figures of $214, $221, $226, and $219 — averaging roughly $220 per square foot. Your subject property will be 1,800 square feet after renovation:
Common mistakes when estimating ARV
- Overestimating renovation quality relative to your comps' actual finish level.
- Using stale or too-distant comps — a sale 18 months ago or three miles away tells you much less than one from last month, two streets over.
- Ignoring neighborhood value ceilings — every neighborhood has a practical top-end price buyers won't exceed.
- Cherry-picking only the highest comps instead of using a representative set.
How ARV determines your fix-and-flip loan size
Fix-and-flip lenders typically size loans as a percentage of ARV rather than purchase price alone, because ARV reflects the value the lender's collateral will actually have once the project is complete. The Fix & Flip program available through BldFi finances up to 75% of ARV, with loan amounts from $100K to $3M and rates starting at 11.0%. The more accurately and conservatively you calculate ARV, the more confidently you and your lender can agree on a loan amount that supports your deal without overleveraging it.
Have an ARV locked in? Let's see what you qualify for.
Submit your project details today and hear back from our team within 48 hours.
Start Your Application