After Repair Value (ARV) Calculator Formula

Understand the math behind the after repair value (arv) calculator. Each variable explained with a worked example.

Use the After Repair Value (ARV) Calculator

Formulas Used

Estimated After-Repair Value

estimated_arv = adjusted_arv

Base Comp Value (Before Adjustment)

base_value = base_arv

Total Investment (Purchase + Rehab)

total_project_cost = total_investment

Potential Equity Created

potential_equity = adjusted_arv - total_investment

Investment-to-ARV Ratio

investment_to_arv = adjusted_arv > 0 ? (total_investment / adjusted_arv) * 100 : 0

Variables

VariableDescriptionDefault
avg_comp_price_per_sqftAverage Comp Price Per Sq Ft(USD)175
property_sqftProperty Square Footage(sq ft)1800
condition_adjustment_pctCondition Adjustment(%)5
purchase_pricePurchase Price(USD)200000
rehab_costTotal Rehab Cost(USD)45000
base_arvDerived value= avg_comp_price_per_sqft * property_sqftcalculated
adjusted_arvDerived value= base_arv * (1 + condition_adjustment_pct / 100)calculated
total_investmentDerived value= purchase_price + rehab_costcalculated

How It Works

Understanding After-Repair Value

ARV is the estimated market value of a property after all planned renovations and repairs are completed. It is a cornerstone metric for house flippers and BRRRR investors.

Formula

ARV = Average Comparable Price Per Sq Ft x Property Sq Ft x (1 + Condition Adjustment)

How to Find Comparables

  • Look at recently sold properties within 0.5 miles
  • Match bed/bath count, square footage within 20%, similar age
  • Use only sales from the last 3-6 months
  • Adjust for differences in condition, lot size, and features

    • The 70% Rule

    Many investors follow the 70% rule: Maximum Purchase Price = ARV x 70% - Rehab Cost. This leaves a margin for profit and unexpected costs.

    Worked Example

    A 1,800 sq ft property with comps averaging $175/sq ft, a 5% positive condition adjustment, $200,000 purchase, and $45,000 rehab budget.

    avg_comp_price_per_sqft = 175property_sqft = 1800condition_adjustment_pct = 5purchase_price = 200000rehab_cost = 45000
    1. 01Base comp value: $175 x 1,800 = $315,000
    2. 02Condition adjustment: $315,000 x 1.05 = $330,750
    3. 03Estimated ARV: $330,750
    4. 04Total investment: $200,000 + $45,000 = $245,000
    5. 05Potential equity: $330,750 - $245,000 = $85,750
    6. 06Investment-to-ARV ratio: $245,000 / $330,750 = 74.1%

    Ready to run the numbers?

    Open After Repair Value (ARV) Calculator