After Repair Value (ARV) Calculator

What Is After Repair Value and Why It Drives Every Flip Decision

After Repair Value (ARV) is the estimated market value of a property after all planned renovations are completed. It is determined by analyzing recently sold comparable properties (comps) in the same neighborhood with similar size, condition, age, and features. According to the CFPB and HUD guidance on property valuation, ARV is the most critical number in any fix-and-flip analysis because it sets the ceiling for your total project cost — including acquisition, rehabilitation, holding, and selling expenses combined.

Conservative investors pull 3-5 closed comps within 0.5 miles, sold within 90 days, and within 10-20% of the subject property's square footage. An ARV derived from a licensed appraiser or experienced local agent is far more reliable than automated valuation models (AVMs) like Zillow Zestimate, which can deviate 5-15% in active or thin markets. The quality of your ARV estimate directly determines the quality of every downstream calculation in this tool.

The 70% Rule — How It Works and When to Adjust It

The 70% rule is the most widely used quick-screening formula in residential house flipping. It states: Maximum Allowable Offer (MAO) = (ARV × 70%) − Repair Costs. The 30% buffer is designed to absorb purchasing closing costs (1-3%), selling closing costs (6-10% including agent commissions), holding costs over the renovation and marketing period, financing costs (hard money loans typically charge 2-4 points plus 10-15% interest), and the investor's desired profit margin.

The 70% threshold is a guideline, not a fixed law. In highly competitive markets like Phoenix, Tampa, or the Sun Belt metros, experienced investors with strong contractor networks and reliable ARV data sometimes underwrite at 75-80%, accepting thinner margins on higher volume. First-time flippers should stay at or below 70% to preserve a safety buffer for cost overruns, which are extremely common — especially in properties with deferred maintenance or those built before 1978 (lead paint, asbestos risk).

Calculating Break-Even ARV and Protecting Your Downside

Break-even ARV is the minimum sale price at which you recover all invested capital without profit or loss. The formula is: Break-Even ARV = Total Costs / (1 − Selling Cost Percentage). This number tells you how much the market can drop from your ARV estimate before you lose money — it is your margin of safety. A deal where your break-even ARV is 15-20% below your estimated ARV is significantly safer than one where the margin is only 5-7%.

Holding costs are frequently underestimated by new flippers. Every month the property sits — during renovation, listing, under contract, and pending closing — carries property taxes, insurance, utilities, possibly HOA fees, and financing interest. A 6-month project at $1,200/month in holding costs consumes $7,200 that must be recovered from the sale price. This tool separates holding costs from rehab costs so you can see exactly how much each component is eating into your projected profit. Last updated: May 2026 based on HUD.gov and CFPB property analysis guidelines.

Using This Calculator Before Making an Offer

Use the sensitivity table to quickly compare your deal at the 60%, 65%, 70%, 75%, and 80% rules. If your actual offer price is above the MAO at the 70% rule but below the 75% threshold, you are taking on above-average risk for a first flip but within range for an experienced operator with high confidence in the ARV. If your offer exceeds the 80% MAO, the deal has no conventional margin of safety — only proceed with a highly conservative ARV and verified contractor bids in hand.

For tax implications including depreciation on property improvements and capital gains on the flip profit, see the Property Depreciation Calculator and consult a CPA who specializes in real estate investment. Short-term capital gains on properties held under 12 months are taxed as ordinary income, which significantly affects net returns on fast flips.