After Repair Value (ARV)

The flipper's essential tool. Determine the future market value of a property and calculate your maximum allowable offer using the 70% rule.

What will the house be worth once fully renovated?
The industry standard is 70%.
Max Allowable Offer (MAO)
$240,000

Based on the 70% investment rule.

Total Potential Profit
$135,000
Equity Capture
30%

What is ARV?

I genuinely believe that the ARV (After Repair Value) is the most important number in real estate investing. If you get this number wrong, your entire deal collapses. It is the estimated market value of a property after all repairs and renovations have been completed, based on comparable properties (comps) in the area.

The 70% Rule: This is a standard safety margin used by house flippers. It suggests that an investor should pay no more than 70% of the ARV, minus the cost of repairs. The remaining 30% covers your profit, holding costs (interest, utilities), and selling costs (commissions, closing fees).

BRRRR Strategy:

  • Buy: Find a distressed property with high ARV potential.
  • Rehab: Renovate to reach the ARV.
  • Rent: Get tenants to cover the mortgage.
  • Refinance: Pull your initial capital back out based on the new ARV.
  • Repeat: Scale your portfolio.