Here is how to calculate ARV. Find what comparable renovated homes recently sold for near the property, adjust each for how it differs, and take the middle of the range. ARV, or after-repair value, is the price your finished flip should sell for. It is the number every other figure in the deal depends on.
Get the ARV wrong by $15,000 and your maximum offer, your profit projection, and your margin of safety are all wrong by more. This guide covers how to pull comps that hold up, how to adjust them, and the mistakes that inflate the number.
Key Takeaways
- ARV is what a fully renovated home like yours has recently sold for nearby, not a listing price or an automated estimate.
- Use closed sales, ideally within one mile and the last 90 days, and at least three of them.
- Adjust each comp for real differences in size, beds, baths, garage, lot, and condition, then take the middle of the adjusted range.
- Never build ARV from active listings, pending sales, or comps across a hard boundary like a highway or school-district line.
- Comps move, so re-pull them at least once during the rehab before you set your list price.
What ARV actually is
ARV is the sale price your property should command once the renovation is done and it is in the same condition as the nicest comparable sales in the area. It is a forecast of a future closed price, built from past closed prices.
Two things it is not. It is not a listing price, because sellers ask for more than the market pays. And it is not a Zestimate or other automated valuation, because those models cannot see your finishes, your floor plan, or the specific block. Use automated estimates to get oriented, then throw the number away and build your own.
ARV sets the ceiling on the whole deal. It feeds your maximum offer through the 70% rule, and it is the top line of your profit formula. See how to calculate house flip profit.
How to pull comps that hold up
A comparable sale, or comp, is a home similar enough to yours that its sale price tells you something real about yours. The appraisal industry has clear standards for what counts, and they are a good baseline for flippers.
Closed sales only. Use homes that have actually sold and recorded. Fannie Mae’s Selling Guide treats sales closed within the last 90 days as the strongest indicator of current value. Its appraisal standards also require at least three closed comps (Fannie Mae Selling Guide). Older sales are fine when they are genuinely more similar, but note that you are reaching back in time.
Close by, and on the same side of every line. Aim for within one mile, and never cross a hard boundary: a highway, a river, a railroad, or a school-district or municipal line. A house half a mile away but in a different school zone is not a comp. Appraisal practice generally favors comps within about a mile and warns against comping across major barriers.
Similar house. Match on the factors buyers actually price: square footage within roughly 20%, the same bed and bath count, a similar lot, and a similar age and style. A 3-bed ranch is not a comp for a 4-bed two-story, even next door.
Renovated condition. You are estimating the value of a finished flip, so lean on comps that were themselves updated or new. A tired original-condition sale tells you what your house is worth today, not what it will be worth after the rehab.
Pull comps from the MLS through an agent, from county sale records, or from a paid data service. Free portals are a starting point, not a source of record.
How to adjust comps
No two houses are identical, so you adjust each comp up or down to account for how it differs from your subject. This is the same sales-comparison method a lender’s appraiser uses, adjusting each comp for differences in the features that affect value (Fannie Mae Selling Guide). The goal is to answer one question: what would this comp have sold for if it were your house?
Work in round dollar amounts, not percentages, and adjust the comp toward the subject:
- Size. If a comp is 150 square feet larger, subtract the local value of that space, often $50 to $150 per square foot depending on the market.
- Beds and baths. A comp with an extra full bath might be worth $10,000 to $20,000 more than your subject in a mid-priced market, so subtract that.
- Garage, basement, and lot. A finished basement, an extra garage bay, or a much larger lot are all real dollars. Adjust for each.
- Condition and finish level. If your rehab will be nicer than a comp, adjust the comp up. If a comp had high-end finishes you are not matching, adjust it down.
A quick worked adjustment: a comp sold for $347,000 but has a finished basement your subject will not have. If a finished basement is worth about $18,000 in your market, the adjusted comp value is $329,000. You do that for every comp, then compare the adjusted figures, not the raw sale prices. Investor education guides walk the same process step by step (BiggerPockets).
Once every comp is adjusted, you have three to six numbers that all estimate the same thing: your finished value. They should cluster. Take the middle of that cluster, not the top.
If your comps do not cluster, that is a signal. Either you have the wrong comps, or the area is too thin or too varied to support a confident number, which is a risk you should price in.
Mistakes that inflate ARV
Most ARV errors push the number up, because an inflated ARV makes a bad deal look workable.
Trusting the number someone handed you. A wholesaler’s ARV is a sales figure. Rebuild it yourself before you make an offer.
Cherry-picking the high comps. Using the three best sales and ignoring three mediocre ones does not raise your resale price. It just sets you up to overpay.
Ignoring condition. Comping a to-the-studs renovation against houses that sold with 1990s kitchens overstates your finished value.
Using stale comps in a moving market. A sale from ten months ago in a market that has softened is telling you about a price that no longer exists.
Comping across a boundary. The identical house on the other side of the highway or in the weaker school zone can sell for tens of thousands less.
Re-pull comps before you list
ARV is a forecast, and the market keeps moving while you rehab. New sales close, listings sit or sell fast, and a comp you leaned on may now look high or low.
Re-pull your comps at least once, near the end of the rehab, before you set a list price. If the number moved down, you want to know before you are under contract, not after. This is the same reason profit tracking treats ARV as a live input, not a fixed one. See house flip profit tracking, stage by stage.
Frequently asked questions
How do I calculate ARV for a house flip?
Pull at least three closed sales of similar renovated homes within about a mile and the last 90 days. Adjust each for differences in size, beds, baths, garage, lot, and finish level. Take the middle of the adjusted range, not the highest sale.
Is ARV the same as appraised value?
They estimate the same thing, a market value, using the same comparable-sales method. An appraisal is a licensed appraiser’s formal opinion for a lender. Your ARV is your own estimate for underwriting, and a conservative one protects you if the appraisal comes in lower.
Can I use Zillow or Redfin to find ARV?
Use them to see recent sales and get oriented. Do not use the automated estimate as your ARV, because it cannot judge your finishes, floor plan, or exact location. Verify every comp against the MLS or county records.
How far off can ARV be?
In a normal market with good comps, a careful estimate is often within a few percent. In a thin or fast-moving market it can be off by 10% or more, which is why you underwrite conservatively and re-check before listing.
Build the number, then protect it
ARV is the foundation of the deal, so build it from closed, nearby, similar sales, adjust honestly, and take the middle of the range. Then re-pull before you list, because the market you sell into is not the one you bought in.
With a defensible ARV in hand, run the rest of the deal through the full flip profit calculation.
This article is for education, not financial or investment advice. Portions were drafted with AI assistance and reviewed by the author.
About the author — Albert Chui. Albert Chui is a real estate investor in the San Gabriel Valley, California, who has flipped roughly 80 houses in the area since 2021. He ran those projects on spreadsheets at first, and learned firsthand how contractor changes, delays, and mid-rehab overruns quietly turn a profitable deal into a thin one. He founded FlipMargin so flippers can see current costs and projected profit throughout a rehab, not just at closing.
