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How to Calculate ARV Accurately

After Repair Value is the most critical number in any wholesale deal. Get it wrong and you'll kill buyer interest or leave money on the table. Here's how to calculate it correctly.

What Is ARV?

ARV (After Repair Value) is the estimated market value of a property after it has been fully renovated to current market standards. It's what an appraiser would value the property at if it were in move-in ready, retail condition.

ARV is the foundation of the 70% Rule and every other wholesale calculation. An overestimated ARV is the #1 cause of deals that fall through and reputation damage with your buyer network.

The 70% Rule Formula

MAO = (ARV × 0.70) − Repairs − Assignment Fee

Where MAO = Maximum Allowable Offer (your max price to the seller)

Step 1: Find True Comparable Sales (Comps)

Comps are the engine of ARV calculation. You need recently sold, similar properties near the subject property. Rules for pulling comps:

Distance: Within 0.25–0.5 miles in urban areas; up to 1 mile in suburban areas
Time: Sold within 90 days (180 days maximum in slow markets)
Size: Within 15–20% of the subject's square footage
Beds/Baths: Same or within ±1 bed and ±0.5 bath
Condition: Fully renovated, retail-ready condition (not distressed)
Property type: Same type (SFR to SFR, not SFR vs condo)

Critical: Never use active listings as comps. Asking price is not market value — only closed sales prove what buyers will actually pay.

Step 2: Where to Pull Comps

MLS access — Most accurate. If you don't have direct access, partner with a licensed real estate agent or use a service that provides MLS data.
PropStream — Best all-in-one investor tool for comps, owner info, and list building. ~$99/month.
Zillow/Redfin — Free but limited. Use the "Recently Sold" filter. Good for a quick sanity check, not professional analysis.
County Appraisal District — Texas CADs (DCAD, HCAD, Bexar CAD, etc.) provide free sold data, often with sale price and date.
RPR (Realtors Property Resource) — Free for licensed agents, comprehensive data.

Step 3: Analyze Your Comps

Once you have 3–5 good comparable sales, analyze them:

Calculate Price Per Square Foot

Divide each comp's sold price by its square footage to get $/sqft. For example:

123 Oak St: $285,000 / 1,400 sqft = $203/sqft
456 Elm Ave: $298,000 / 1,500 sqft = $199/sqft
789 Main Dr: $279,000 / 1,380 sqft = $202/sqft

Average: ~$201/sqft. Apply this to your subject property: 1,420 sqft × $201 = ~$285,400 ARV.

Make Adjustments

Adjust for differences between the subject and each comp. Common adjustments:

Garage: +$10K–$15K for 2-car attached garage vs none
Pool: +$15K–$25K in Texas (varies significantly by neighborhood)
Lot size: +/− ~$3–$5 per extra/fewer sq ft of lot (context-dependent)
Condition: Discount if comp was full gut renovation vs standard update
Location: Street frontage, backing a highway, corner lot all affect value

Step 4: Apply a Conservative ARV

After your analysis, don't use the highest comparable. Use a conservative, defensible number. If your comps range from $265K to $295K, use $270K–$275K as your ARV. This protects your buyers and your reputation.

Best Practice: Use the lowest-priced comp as your baseline, then make upward adjustments only for clear, verifiable features. Your buyer's lender or appraiser will do the same — be conservative.

Step 5: Calculate Your Offer

Now apply the 70% rule with your ARV to determine your Maximum Allowable Offer (MAO):

ARV: $275,000
ARV × 70%: $192,500
Minus Repairs: − $35,000
Minus Assignment Fee: − $10,000
Max Offer to Seller: $147,500

The investor buying from you pays $157,500 (your offer + your $10K fee). Their all-in cost after $35K repairs is $192,500 — at 70% of ARV, they have a $82,500 profit margin to cover holding costs, closing costs, and their own profit on the flip.

Common ARV Mistakes and How to Avoid Them

Using stale comps — Markets shift. Comps from 6 months ago may not reflect today's prices.
Over-improving to full renovation comps — If your subject will get a "mid-grade" renovation, don't comp against full luxury updates.
Ignoring location micro-factors — A house one block from a freeway on-ramp trades very differently than one two blocks away.
Not accounting for school district lines — In DFW especially, being in a top-rated school district can add $30K–$50K to value.
Cherry-picking comps — Don't exclude lower comps to make the deal look better. Your buyer will find them.

ARV vs. As-Is Value

Understand the difference:

As-Is value — What the property would sell for right now, in its current condition (often 40–70% of ARV for distressed properties)
ARV — What it will be worth after full renovation to retail standards

Your job as a wholesaler is to buy close to as-is value and sell to investors who will capture the spread between purchase (+ renovation) and ARV.

Try the Deal Analyzer

Use our free Deal Analyzer tool to instantly calculate MAO, investor ROI, and deal profitability once you have your ARV and repair estimate.

Disclaimer: This article is for educational purposes only. ARV calculations and formulas discussed are general guidelines used by investors and do not constitute appraisal services or professional financial advice. Actual property values may differ significantly. Always perform independent due diligence and consult licensed professionals.