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ARV Calculator For Flipping Houses & Wholesaling

Finding the right ARV Calculator can save time, but it’s important you learn how to calculate ARV on your own before taking shortcuts!

Looking for an ARV calculator? You have come to the right place! There’s no question that the most important acronym as a real estate investor, house flipper and wholesaler is “ARV”. You don’t have a deal unless you have your ARV dialed in. Understanding the ARV formula and having an ARV calculator is a must if you plan to flip houses. First, we first we must understand the meaning of ARV and the logic behind it.

For years, home values have been determined by the “the market”. That’s right, the true value of what buyers are willing to pay property is not determined by comps, appraisers, Zestimates or even ARV. It’s determined by the market and what buyers are willing to pay for your house vs. all the rest of them. Nobody has a crystal ball and can predict exactly what a house will sell for. Unfortunately, we won’t know that true value until the house sells. In the meantime, how do we accurately predict what we think a home will sell for?

ARV Meaning

ARV stands for “After Repair Value”. This acronym is commonly used by wholesalers and house flippers to predict the value of a house after the repairs and renovations are complete. An ARV calculator is a handy tool to quickly determine this value by using comparable homes in the neighborhood. Even with an ARV calculator, ARV is very subjective. ARV calculations are only as accurate as the comps selected and in many cases, no 2 houses are the same. You may want to use a realtor to run a CMA on your subject property to cross reference your ARV until you get comfortable calculating ARV yourself.

Check out our video and blog post on Wholesaling Houses Step 5: ARV and Offer for some helpful tips on calculating ARV and coming up with an offer for the seller.

How is ARV Different from an Appraisal?

Appraisals are usually the gold standard for determining home values. Lenders require them for a purchase to make sure the home you are buying is worth the price you are paying. An appraiser will pull several comparable homes and then make minor adjustments to the subject property to determine the value.

ARV, on the other hand, is a hypothetical “after repair value” of what a house will sell for after repairs and improvements have been made. An ARV calculator will take 3-5 comparable properties in excellent condition and come up with an average value. Since no house is exactly the same, some adjustments will need to be made. The ARV calculator will automatically make these adjustments for you.

Calculating ARV Example

Even though it may sound technical, determining ARV without an ARV calculator is actually not difficult. It’s especially easy if the house is in a populated area with lots of similar comps. Let’s run through a quick example.

Subject House in Need of Repairs:

  • 3 bed 1 bath
  • 1,200 sq ft
  • Full unfinished basement
  • Repairs needed: New roof, new flooring, update bathroom/kitchen, replace 2 windows

Comp #1:

  • 3 bed 1 bath
  • 1,300 sq ft
  • Full finished basement
  • Recently flipped (bought 6 months earlier for 120k)
  • Sold price (within past 12 months) $225,000

Comp #2:

  • 3 bed 1 bath
  • 1,200 sq ft
  • Full unfinished basement
  • Recently flipped (bought 4 months earlier for 130k)
  • Sold price (within the past 12 months) $210,000

Comp #3:

  • 3 bed 2 bath
  • 1,100 sq ft
  • No basement
  • Not flipped but in good, retail condition
  • Sold price (within the 12 months) $195,000

As you can see, all 3 of these comps have 3 bedrooms, are similar in square footage and 2/3 were recent flips. Another thing to keep in mind is the style and age of the home. You want your comps to be similar in style and age to the subject property. It doens’t make sense to use a comp that was built 5 years ago if the subject property was built in 1950.

Let’s run through the math a couple different ways to see what it looks like.

Taking the Mean

If you paid attention in math class, you should be familiar with calculating the mean and taking the average. In my opinion, these 3 comps are similar enough, and comp #3 did sell for lower than the first two because it wasn’t a fresh flip. I can justify just taking the mean of these 3 comps and calling that my ARV.

225k + 210k + 195k = 630k / 3 = 210k ARV

The mean of these 3 comps would be $210,000. That is a safe ARV for the subject property. Safe is good, especially if you are a beginner. You don’t want to risk overestimating the ARV and losing profits.

Picture of neighborhood with similar houses. ARV calculator should use as many comps in the same neighborhood as possible.
Look for flipped houses in the same neighborhood when selecting comps. This will give you the most accurate ARV.

Calculating ARV: Making Adjustments

Not all comps are the same and in most cases, adjustments will need to be made. An argument could be made that the ARV of comp #3 is higher because it’s not a fresh flip and it has a 2nd bathroom. An argument could also be made that the ARV could be slightly lower than comp 1 & 2 because it does not have a basement. In my experience, not having a basement would be a bigger negative than not having a 2nd bathroom. In this example, I would downgrade the value of comp #3 by 5-10k (compared to the ARV of comp 1 & 2).

Comp #1 also has a finished basement so you could downgrade the value of this one by 10-15k. However, if you decided to finish the basement in the subject house, Comp #1 would be your best comp for ARV.

Comp #2 is your best comp if you decide not to finish the basement.

As you can see, ARV can vary depending on the level of rehab. If you are the end buyer and house flipper, you will adjust your ARV based on what your plans are with the house. If you are a wholesaler, you typically go with the highest possible ARV. In this example, that would be $225,000.

Free ARV Calculator

There are several free ARV calculator’s if you are looking for a short cut. While an ARV calculator is handy, we strongly recommend you practice calculating ARV on your own. Becoming good at estimating ARV is critical to your house flipping and wholesaling success!

REI/Kit ARV Calculator

Real Estate Skills ARV Calculator

Wholesale Invest Pro ARV Calculator

If you want to learn how to wholesale real estate step-by-step (with no money), check out my ebook!

The Step-by-Step Guide to Getting Your First Wholesale Deal in 30 Days or Less
Wholesaling real estate step-by-step pdf

About the author: Ryan hovers around a 10-20 handicap any given day. But the talent is there, no question.