ARV Calculator - After Repair Value for Fix-and-Flip
Free ARV calculator to determine after repair value, total investment costs, and profit potential for real estate fix-and-flip properties
ARV Calculator
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What is an ARV Calculator?
An ARV calculator (After Repair Value calculator) is a real estate investment tool that determines the estimated market value of a property after completing all planned repairs and renovations. ARV is essential for fix-and-flip investors to calculate maximum purchase price, renovation budgets, and potential profit margins before acquiring distressed properties.
This calculator helps with:
- Investment analysis - Evaluate fix-and-flip profitability and ROI potential
- Purchase decisions - Determine maximum offer price using 70% rule
- Budget planning - Calculate total investment including all costs
- Profit projection - Estimate net profit after repairs and selling expenses
- Risk assessment - Identify deals with adequate profit margins and safety buffers
For comprehensive property investment analysis, use our real estate calculator to evaluate cash flow, appreciation, and total returns.
When calculating investment returns, explore our ROI calculator for detailed profitability analysis across real estate projects.
To determine overall home affordability, our house affordability calculator helps evaluate purchasing options based on income and expenses.
How ARV Calculation Works
ARV calculation combines comparable sales analysis with comprehensive cost accounting:
Total Investment = Purchase + Repairs + Holding + Selling Costs
Profit = ARV - Total Investment
ROI = (Profit ÷ Total Investment) × 100
The 70% Rule:
Example: Property ARV = $200,000, Repairs = $30,000, Purchase = $100,000. Total investment with $20,000 selling costs and $9,000 holding costs = $159,000. Profit = $200,000 - $159,000 = $41,000. ROI = 25.8%. The 70% rule suggests max offer = ($200,000 × 0.70) - $30,000 = $110,000.
Conservative ARV estimates based on recent comparable sales protect profit margins. Include all costs: purchase, repairs, holding (taxes, insurance, utilities, interest), and selling (realtor fees, closing costs) for accurate profitability assessment.
Key Concepts Explained
Comparable Sales (Comps)
Recently sold similar properties in same area, same condition. Use 3-5 comps sold within 3-6 months to estimate accurate ARV.
70% Rule
Conservative guideline: pay max 70% of ARV minus repairs. Provides profit margin and safety buffer for unexpected costs.
Holding Costs
Monthly expenses during renovation: property taxes, insurance, utilities, loan interest. Often overlooked but impact profitability significantly.
Selling Costs
Realtor commissions (5-6%), closing costs, transfer taxes. Typically 8-10% of ARV, reducing net profit from sale.
How to Use This Calculator
Enter Purchase Price
Input actual or target purchase price for the property (e.g., $100,000)
Estimate Repair Costs
Calculate renovation costs from contractor quotes or detailed scope of work
Determine ARV
Research comparable sales to estimate property value after repairs complete
Add All Costs
Include selling costs percentage and monthly holding costs for complete analysis
Review Profitability
Analyze profit, ROI, and deal quality to make informed investment decisions
Check 70% Rule
Compare purchase price against 70% rule maximum to ensure adequate profit margin
Benefits of Using ARV Calculator
- • Accurate Profit Projections: Calculate exact profit potential including all costs before purchasing, preventing unprofitable deals and financial losses.
- • Maximum Offer Determination: Use 70% rule calculations to determine highest purchase price while maintaining profitable margins and risk buffers.
- • Comprehensive Cost Analysis: Account for all expenses including often-overlooked holding and selling costs for realistic profitability assessment.
- • ROI Comparison: Compare multiple potential deals using standardized ROI metrics to identify best investment opportunities efficiently.
- • Risk Management: Identify deals with insufficient profit margins or excessive costs before commitment, protecting investment capital.
- • Negotiation Confidence: Support purchase offers with data-driven calculations showing profitable outcomes at specific price points.
Factors That Affect ARV Profitability
1. Market Conditions
Rising markets increase ARV and profits, declining markets reduce values. Time purchases during stable or appreciating market conditions when possible.
2. Renovation Quality & Scope
Over-improving for neighborhood reduces ROI, under-improving limits ARV. Match renovation quality to comparable properties in target price range.
3. Unexpected Costs
Hidden structural issues, permit problems, contractor delays increase costs. Budget 10-20% contingency for unexpected expenses in ARV calculations.
4. Holding Period Length
Extended renovations increase holding costs, reducing profit. Efficient project management and realistic timelines protect profit margins.
5. Financing Costs
Hard money loans (10-15% interest) versus conventional financing significantly impact profitability. Factor loan costs into total investment calculations.
Frequently Asked Questions (FAQ)
Q: What is ARV in real estate investing?
A: ARV (After Repair Value) is estimated market value after all repairs complete. Crucial for fix-and-flip investors to determine max purchase price and profit margins.
Q: How do you calculate ARV?
A: Use comparable sales (comps) of recently sold similar properties in same area in good condition. Compare size, location, features, condition to estimate value.
Q: What is the 70% rule in house flipping?
A: Pay max 70% of ARV minus repair costs. For $200K ARV, $30K repairs: Max offer = ($200K × 0.70) - $30K = $110K.
Q: What costs are included in ARV calculations?
A: Include purchase price, repairs, holding costs (taxes, insurance, utilities), financing costs, and selling costs (realtor fees, closing costs).
Q: How accurate should ARV estimates be?
A: Within 5-10% for safe decisions. Use multiple recent comps, consult real estate agents, consider market conditions. Conservative estimates protect margins.
Q: What's a good ROI for fix-and-flip projects?
A: Target minimum 20-30% ROI to justify risk and effort. Higher ROI (40%+) provides buffer for unexpected costs and market fluctuations.