If you're investing in real estate, one of the most important numbers you need to understand is ARV—After Repair Value.
In this guide, we'll break down what ARV means and how investors in Colorado use it to evaluate deals.
What Is ARV?
ARV stands for After Repair Value, the estimated value of a property after renovations are completed.
Why ARV Matters
ARV helps investors determine:
- Whether a deal is profitable
- How much to spend on renovations
- What price to buy at
Example
- Purchase Price: $200,000
- Rehab Cost: $40,000
- ARV: $320,000
Potential equity: $80,000
How Investors Use ARV
Investors often use rules like:
Buy at 70% of ARV
This leaves room for rehab costs, holding costs, and a profit margin.
ARV and Financing
ARV is especially important for:
- BRRRR strategy
- DSCR refinancing
- Fix-and-flip deals
Lenders use post-rehab appraisals to confirm value. ARV also drives LTV on a refinance — see our DSCR loans guide, our fix & flip loans guide, and our DSCR vs. fix & flip comparison for how this works on investment properties.
Final Thoughts
Understanding ARV is essential for any real estate investor. It helps you make smarter decisions and avoid overpaying for properties.
See ARV in action in our BRRRR and no-seasoning DSCR case studies.
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Frequently asked questions
How is ARV calculated?
ARV is estimated by pulling 3–5 recently sold comparable properties in similar condition to the post-rehab subject property, then averaging their price per square foot.
What is the 70% rule in real estate?
Investors target a maximum purchase + rehab budget of 70% of ARV, leaving 30% for profit, holding costs, and closing costs on flips.
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