ARV Calculator Guide
Master the art of property valuation - the most critical skill in house flipping
ARV = After Repair Value - The estimated value of a property after all renovations are complete.
Why ARV Matters
Accurate ARV calculation is crucial because it determines:
- Your maximum offer price
- Potential profit margin
- Feasibility of the deal
- Amount you can borrow
- Sales price expectations
The Basic ARV Formula
ARV = Price Per SqFt × Subject Property SqFt + Adjustments
Step 1: Find comparable properties
Step 2: Calculate price per square foot
Step 3: Apply to subject property
Step 4: Make adjustments
Finding Good Comps
What Makes a Good Comp?
- Sold within last 6 months (3 months is ideal)
- Same neighborhood or immediately adjacent
- Similar square footage (±10%)
- Same age (±5 years)
- Similar bed/bath count
- Similar style and construction
- Normal sale (not foreclosure/short sale)
Where to Find Comps
- MLS: Most accurate (requires agent)
- Redfin: Good sold data
- Zillow: Verify with other sources
- County Records: Most reliable
- Auction Results: For distressed properties
Step-by-Step ARV Calculation
Example Property
- Address: 123 Main St
- Square feet: 1,500
- Beds/Baths: 3/2
- Year built: 2005
- Condition: Needs full rehab
Step 1: Find Comps
Comp 1: 145 Main St - 1,450 sqft - Sold 2 months ago - $265,000
Comp 2: 160 Main St - 1,600 sqft - Sold 1 month ago - $285,000
Comp 3: 110 Oak St - 1,550 sqft - Sold 3 months ago - $270,000
Step 2: Calculate Price Per SqFt
Comp 1: $265,000 ÷ 1,450 = $182.76/sqft
Comp 2: $285,000 ÷ 1,600 = $178.13/sqft
Comp 3: $270,000 ÷ 1,550 = $174.19/sqft
Average: $178.36/sqft
Step 3: Apply to Subject
1,500 sqft × $178.36 = $267,540
Base ARV: $267,540
Step 4: Make Adjustments
Subject has newer HVAC: +$5,000
Subject has no garage: -$10,000
Subject on busier street: -$5,000
Net adjustment: -$10,000
Final ARV: $257,540
Adjustment Guidelines
Location Adjustments
| Feature | Superior | Inferior |
|---|---|---|
| Street | +$5,000 | -$5,000 |
| School District | +$10,000 | -$10,000 |
| Views | +$15,000 | -$5,000 |
Feature Adjustments
| Feature | Value |
|---|---|
| Extra Bathroom | +$10,000 |
| Extra Bedroom | +$8,000 |
| Garage Space | +$5,000 per bay |
| Swimming Pool | +$15,000 |
Time Adjustments
Markets change over time. Adjust for appreciation/depreciation:
Monthly Change % = (Current Price - Old Price) ÷ Old Price ÷ Months
Example:
3 months ago: $250,000
Today: $255,000
Monthly increase: (255,000 - 250,000) ÷ 250,000 ÷ 3 = 0.67%
For a 4-month-old comp: 4 × 0.67% = 2.68% increase
Advanced Techniques
Bracketing
Always have comps both above and below your subject property. This shows the value range.
Weighted Comps
- Recent sales weigh more
- Similar properties weigh more
- Proximity matters
- Same neighborhood > Adjacent
Statistical Analysis
- Calculate median and mean
- Look for outliers
- Use standard deviation
- Track market trends
Common ARV Mistakes
- Using active listings (only sold properties)
- Ignoring condition differences
- Using old sales data
- Not enough comps
- Forgetting time adjustments
- Letting emotion influence value
- Not verifying square footage
ARV Quick Reference
Red Flags
- □ Only one good comp available
- □ Large price variance between comps
- □ All comps over 6 months old
- □ Different property types
- □ No recent sales in area
Best Practices
- □ Always verify in person
- □ Take photos of comps
- □ Build a comp database
- □ Document your adjustments
- □ Be conservative
The 70% Rule Connection
Once you have ARV, use the 70% rule to find your maximum offer:
MAO = (ARV × 0.70) - Repair Costs
Using our example ARV of $257,540:
MAO = ($257,540 × 0.70) - $45,000
MAO = $180,278 - $45,000
Maximum Offer: $135,278
Tools & Resources
The First Flip Starter Kit includes:
- Professional ARV calculator spreadsheet
- Comp analysis template
- Adjustment matrix
- Market trend tracker
- Deal analyzer with ARV calculations