ARV Calculator – After Repair Value

The After Repair Value (ARV) relies on projecting what a distressed property will be worth on the open market once all planned upgrades are finished. Depending on your available data, ARV can be found by adding your projected renovation value to the current market value, or by multiplying the total property area by the average price per square foot of recently remodeled comparable properties in the neighborhood. To protect your investment, the calculator uses the standard investor 70% rule to establish your Maximum Bid Price. The core formulas are: After Repair Value = Property Current Value + Value of Renovations; Total Cost of Renovation = Repair Cost * Total Area Needing Repairs; and Maximum Bid Price = (ARV * (Investors Purchase Rule / 100)) - Total Cost of Renovation.

Imagine you are evaluating a distressed suburban home with a current market value of $200,000. You plan to execute a total kitchen and bathroom overhaul adding $80,000 in value, yielding an After Repair Value of $280,000 ($200,000 + $80,000). Your contractor estimates total renovation costs at $40,000. Applying a conservative 70% investor purchase rule, your maximum allowable bid is calculated as ($280,000 * 0.70) - $40,000, which equals $156,000. This ensures you leave enough room for holding costs, closing fees, and a healthy profit margin upon resale.

Always rely on true comparable sales (comps) that are within a half-mile radius and sold within the last 90 days to determine your post-renovation square footage price. Never overestimate the value added by luxury finishes in a neighborhood of modest homes; upgrades should match market expectations. Finally, add a 15% contingency buffer to your renovation estimates to safeguard against unexpected structural issues discovered mid-project.