How Do I Find The After Repair Value (ARV) Of A Property?

To calculate the after repair value (ARV) of a property, look at the most recently available real estate sales data near the subject property. Your goal is to create a fact-based estimate of the value of the house once it has been repaired and remodeled. Look for the 3 to 5 best comparable properties (comps) that meet the following criteria:

Sold within the past 6 months
Located within a 0.5-mile radius from the subject property
Within +/- 250sqft of the subject property
Have the same or similar amount of bedrooms and bathrooms
Have similar features, such as lot size, in a similar surrounding neighborhood, similar street
Have recently updated and remodeled.

Ideally, the best comps have been "flipped," thus demonstrating how much a buyer is willing to pay for a fully remodeled home in the same area.

Based on the available sold comps, make your best assumption as to what the property will sell for in a remodeled condition.

To do so, consider the average price and the average price per square foot of the top 3-5 comps. Adjust that price for any special features that the subject property has or does not have.

For example, if the top 3 comps are $250,000, $285,000, and $260,000, we should be able to justify that our property can sell for around $265,000.

If there are no comps that meet these criteria, expand your search to include properties that are further out (up to 1 mile), that are larger or smaller, and that have sold less recently. Take the average price per square foot and make a conservative estimate as to what the subject property will be worth after repairs.

If there are still no comps, move on from the deal. Investors will be unwilling to flip a house without any proof indicating that there is a market for renovated properties in that area.