After Repair Value (ARV)

ARV is a forward-looking estimate: not what a property is worth today, but what it should sell for after the rehab is finished. It is usually derived from comparable sales of similar, already-renovated homes in the same area, which makes the quality of those comparables the main driver of accuracy.

ARV anchors the core math of a flip. A common guideline, the 70 percent rule, says an investor should pay no more than about 70 percent of ARV minus repair costs, leaving room for holding costs, selling costs, and profit. Because the entire deal is built on a projected number, an over-optimistic ARV is one of the most common ways a flip loses money, so conservative, well-supported estimates matter. ARV is an industry convention, not a regulated appraisal standard.