After-repair value (ARV) is the estimated market value of a property after all renovations are complete. It’s the single most important number in wholesaling because every other calculation flows from it.
Why ARV Matters
The standard wholesaling formula is simple:
Maximum Allowable Offer = ARV × 70% - Repair Costs
If the ARV is wrong, the entire analysis is wrong. Overestimate ARV by 10% and a deal that looks like a home run becomes a loss. Underestimate it and you pass on deals that would have been profitable.
How ARV Is Calculated
ARV is based on comparable sales — recent transactions of similar properties in the same area, after renovations. A proper comp analysis looks at:
- Location — same neighborhood or subdivision, ideally within a half-mile radius
- Size — similar square footage, bedroom/bathroom count
- Condition — sold in renovated or updated condition
- Recency — sold within the last 3-6 months
- Property type — same classification (single-family, duplex, etc.)
The more comps you have that closely match, the more confident your ARV estimate.
Common ARV Mistakes
Using asking prices instead of sold prices. Listings tell you what sellers hope to get. Sold prices tell you what buyers actually paid. Only sold prices matter for ARV.
Comparing to unrenovated properties. If your strategy involves a full rehab, your comps need to be fully rehabbed properties. Comparing to as-is sales will undervalue the ARV.
Ignoring market trends. In a rapidly appreciating market, 6-month-old comps might understate current values. In a cooling market, they might overstate them. Adjust accordingly.
Cherry-picking the highest comp. It’s tempting to use the one sale that makes the deal look great. Use the median of your comps, not the outlier.
ARV in Automated Deal Analysis
When AI extracts deal data from wholesaling newsletters, ARV is one of the key fields. Most newsletters include the sender’s ARV estimate, which is a useful starting point but should always be verified.
Having ARV data extracted automatically and stored in a structured format makes it easy to filter and compare deals at a glance — sorting by ARV, calculating spreads, and identifying which deals merit deeper analysis.