How to Calculate ARV (After Repair Value) Like a Professional

ARV — After Repair Value — is the most important number in any wholesale deal. Your MAO depends on it, your offer depends on it, your buyer's ability to close depends on it. Get it wrong by 10% and you'll either lose the deal or send it to a buyer who backs out at inspection.

This guide covers the professional four-step method for calculating ARV on any distressed property — the same process appraisers and experienced flippers use.

What ARV actually is

ARV is what a property would sell for at retail, fully renovated to current market standards. It's not what the property is worth today (that's current value). It's not what Zillow says (Zestimate algorithms are blind to condition).

ARV answers: "If I fixed this up completely and listed it next month, what would a retail buyer pay?"

Step 1: Pull comparable sales (comps)

Good comps are recent, close, and similar:

• Recent: sold in the last 90 days (180 days max in slow markets)
• Close: within 0.5 miles ideally, 1 mile max
• Similar: same subdivision, same school district, same road classification

Then size and specs:

• Square footage within ±15% of subject
• Same bed/bath count (±1)
• Same property type (single-family vs townhouse vs condo)
• Similar age (within 10 years)

Target: 3–5 comps. If you can't find 3 that fit this criteria, widen your search in steps (first time radius, then distance, then size) and note how much you relaxed.

Where to pull comps from

• MLS (via licensed agent) — gold standard, most accurate sales data
• PropStream, BatchLeads, ReadyDeals — close to MLS accuracy, available to wholesalers
• Zillow/Redfin "recently sold" filter — free, but less accurate
• County recorder's office — most accurate, but lacks property details like beds/baths

Cross-reference at least two sources for any comp you rely on.

Step 2: Adjust comps for condition

Every comp you find is likely in a different condition than your subject. Adjustments make the comparison apples-to-apples.

General adjustment amounts:

Remember: you're adjusting comps to your subject. If the comp has a renovated kitchen and your subject (fully renovated, as you'll sell it) does too, no adjustment. If your subject won't have a pool but the comp did, subtract the pool premium.

Step 3: Calculate the average

After adjusting each comp to match your subject post-renovation:

1. Convert each adjusted price to price-per-square-foot
2. Average (or take the median) across 3–5 comps
3. Multiply by your subject's square footage
4. That's your ARV starting point

Worked example:

• Subject: 3BR/2BA, 1,500 sqft, needs full renovation
• Comp 1: sold $280K, 1,450 sqft, fully renovated → $193/sqft
• Comp 2: sold $295K, 1,520 sqft, partially renovated → +$15K adjustment = $310K → $204/sqft
• Comp 3: sold $275K, 1,400 sqft, fully renovated → $196/sqft
• Average: $198/sqft
• Subject ARV: $198 × 1,500 = $297,000

Step 4: Sanity-check with market velocity

Ask two questions:

1. How fast are comps selling? If days-on-market is under 30, your ARV estimate is probably conservative (strong market). Over 60 days, be pessimistic — use the lower end of your range.
2. Are prices rising, stable, or falling? If market is cooling, shave 3–5% off your ARV as a safety buffer.

ARV vs. appraisal vs. Zestimate

These three numbers are often different. Why:

• Zestimate is algorithmic, often off by 10–20% on distressed properties. Use for a sanity check only.
• Appraisal is a licensed professional's opinion using specific approaches (sales comparison, cost, income). Conservative by design.
• Your ARV is what you estimate the post-renovation retail price will be. Usually close to appraisal when properly done.

The single most common ARV mistake

Using comps that weren't actually similar.A 1,500 sqft ranch in the same ZIP but in a different subdivision can sell for 20% less than yours. Same ZIP doesn't mean same comp.

Walk the comps if you're unsure. Drive by their exteriors. Compare street appeal, yard condition, and neighborhood feel. Numbers don't capture everything.

When to use low-ARV vs high-ARV from your range

• Use low ARV when: market is cooling, comps are sparse, the subject is in a transitional block, or you're new and still calibrating
• Use mid-ARV when: comps are tight, market is stable
• Use high ARV when: market is clearly appreciating, comps are all at the top end, your subject has unique positive attributes (cul-de-sac, view, larger lot)

Building the MAO from ARV

Once ARV is set, your MAO formula kicks in:

See our full MAO guide for worked examples.

Quick tools for ARV

ReadyDeals' lead detail pages include a server-side ARV calculator that pulls comparable sales from the 79M-record database and auto-adjusts by area. Saves 15–30 minutes per deal vs manual spreadsheet work.

Try the free MAO calculator →