What does ARV mean in real estate?
ARV — After Repair Value — is an estimate of what a property will be worth after all planned renovations are completed, used by investors to underwrite deals and determine the maximum purchase price they can afford to pay.
ARV is a projected number, not a current one. It represents the value a property should achieve once it has been renovated to a market-ready condition, based on comparable sales of similar properties in similar condition. The accuracy of an ARV estimate depends entirely on the quality of the comps used and how realistically the renovation scope is assessed.
The most common investor formula using ARV is the 70% rule: don't pay more than 70% of ARV minus estimated repair costs. If a property has an ARV of $300,000 and needs $50,000 in repairs, the maximum purchase price under this rule would be ($300,000 × 0.70) − $50,000 = $160,000. The 70% figure is a rough margin for profit, holding costs, and risk — not a law.
ARV is most commonly used in fix-and-flip analysis, but it also drives hard-money lending decisions. Lenders who fund renovation projects typically lend a percentage of ARV (often 65–70%) rather than a percentage of the current as-is value, because the collateral after renovation is the most likely exit scenario.
The biggest risk in ARV underwriting is using flawed comps — either comps that are too geographically distant, sold too long ago, or aren't genuinely comparable in condition and finish level. A fully renovated property in a different micro-neighborhood can produce a misleadingly high ARV estimate. County sale history data — which Tracts provides by parcel — gives you the raw transaction record; the judgment about comparability remains yours.