Estimate a property's after-repair value from comps, then find your maximum offer with the 70% rule.
After-repair value(ARV) is what a property will be worth once it’s fully renovated — not what it’s worth today. Flippers and BRRRR investors use ARV to decide how much to pay for a distressed property and how much to budget for repairs, and lenders use it to size hard money and rehab loans.
The standard method is comparable sales: find recently sold, renovated homes near the subject that are similar in size and style, work out their average price per square foot, and multiply by the subject’s square footage.
ARV = Comparable $/Sq Ft × Subject Sq Ft
Flippers use the 70% rule to set a maximum offer: pay no more than 70% of ARV minus your repair costs. That buffer is meant to cover holding costs, financing, closing, and profit.
Max Offer = (ARV × 70%) − Repair Costs
A 1,500 sq ft house in an area where renovated comps sell for $200/sq ft has an ARV of 1,500 × $200 = $300,000. With $40,000 of repairs and the 70% rule, your max offer is ($300,000 × 70%) − $40,000 = $170,000. Adjust the rule percentage above — experienced flippers in hot markets sometimes stretch to 75%.
ARV is only as good as your comps and repair estimate — bad comps or a low rehab budget will throw off both the value and your max offer. Verify comps with an agent or appraiser, and pad your repair number. When the deal pencils out, run the numbers on the Fix & Flip Calculator and the BRRRR Calculator, then get matched with hard money and fix-and-flip lenders, or estimate your loan with the Hard Money Loan Calculator.
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Get MatchedAfter-repair value (ARV) is what a property will be worth once it is fully renovated — not its current as-is value. Flippers and BRRRR investors use ARV to decide how much to pay and how much to budget for repairs, and lenders use it to size rehab loans.
The standard method is comparable sales: find recently sold, renovated homes nearby that are similar in size and style, calculate their average price per square foot, and multiply by the subject property's square footage.
The 70% rule sets a maximum offer for a flip: pay no more than 70% of the ARV minus repair costs. The 30% buffer is meant to cover holding costs, financing, closing, and profit. Some experienced flippers stretch to 75% in hot markets.
ARV is only as reliable as your comparable sales and repair estimate. Poor comps or an underestimated rehab budget will distort both the value and your max offer, so verify comps with an agent or appraiser and pad the repair number.
Current (as-is) value is what the property is worth today, in its present condition. ARV is the projected value after renovations. The gap between the two, minus your repair costs, is where a flip's profit comes from.
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