ARV
Calculator
Calculate After Repair Value and maximum bid price using the 70% rule.
Understanding After Repair Value
ARV (After Repair Value) is critical for fix-and-flip and renovation deals. This calculator uses the 70% rule to determine the maximum price you should pay for a property based on its future value after repairs.
Why ARV Matters
- ✓Protects profit on fix-and-flip projects
- ✓The 70% rule prevents overpaying for properties
- ✓Ensures adequate profit margin after costs
- ✓Helps you pass on bad deals quickly
Property Details
Results
ARV
$150,000
Max Bid Price
$80,000
Profit
$45,000
ROI
56.25%
Deal Summary
Max Offer
$80,000
Potential Profit
$45,000
- NCF loan — up to 75% of ARV70%
- Your equity / cash-in30%
The blue slice is the financing NCF can provide against the after-repair value — up to 75% LTV. The gold slice is the cash you bring. Raising your investor rule past 75% does not grow the loan: NCF caps at up to 75% of ARV, so the extra becomes equity.
The 70% Rule Explained
- ✓Formula: (ARV × 0.70) - Repair Costs = Max Offer
- ✓30% margin covers costs, holding, and profit
- ✓More conservative than some investors use
- ✓Adjust based on market conditions and profit target
Critical Expenses to Include
- ✓Actual construction and labor costs
- ✓Hard money loan interest (usually 3-4 months)
- ✓Holding costs (taxes, insurance, utilities)
- ✓Realtor fees and closing costs (5-8%)
💡 Pro Tip
Be conservative when estimating ARV. Research comparable properties that actually sold in your market, not listings. Also, build in a 10-15% contingency for unexpected repairs. Many flips fail because investors underestimate repair costs and overestimate after-repair value.
Key Metrics You Should Know
Cap Rate
Cap rate helps validate your ARV estimate. If comp sales show properties selling at 6% cap rate, use that to reverse-engineer your target ARV.
Profit Margin
Net profit after all expenses. Most successful flippers target 20-30% profit margin minimum to account for unexpected costs and market risks.
Real Flip Examples Using the 70% Rule
Profitable Flip
- Estimated ARV: $300,000
- Estimated repairs: $50,000
- Max offer (70%): $160,000
- Holding costs (6 mo): $20,000
- Realtor fees (6%): $18,000
Total Investment: $248,000
Sale Price: $300,000
Net Profit: $52,000 (21% ROI)
Deal to Avoid
- Estimated ARV: $300,000
- Estimated repairs: $50,000
- Purchase offer: $200,000
- Holding costs (6 mo): $20,000
- Realtor fees (6%): $18,000
Total Investment: $288,000
Sale Price: $300,000
Net Loss: $12,000 (Negative!)
The Fix & Flip Timeline
Due Diligence
Analyze comps, estimate ARV, calculate repairs
Acquisition
Close deal, secure funding (2-4 weeks)
Renovation
Execute repairs (3-4 months typical)
Sale
List & close sale (1-2 months)
ARV Underwriting & Lender Requirements
What Lenders Require
- ✓After-repair appraisal: Certified appraiser validates ARV
- ✓Scope of work: Detailed repair plan and contractor bids
- ✓Comp analysis: Market data supporting ARV estimates
- ✓Project timeline: Realistic renovation schedule
Critical Success Factors
- →Conservative ARV: Use lowest comp sale, not highest listing
- →Accurate repairs: 10-15% contingency on all estimates
- →Fast execution: Every month costs money - stay on schedule
- →Quality work: Shortcuts reduce final value and profit
Pre-Application Preparation Checklist
Ready to Get Started?
Connect with our lending specialists to discuss financing for your next project.
Get Pre-Qualified in Minutes
Our specialists review applications in minutes. No income documentation required. Closing in as little as 3 weeks.
- ✓ Pre-qualified in minutes
- ✓ No income documentation
- ✓ Closing in as little as 3 weeks
- ✓ Competitive rates for qualified borrowers
5-minute application • Commercial Lending by New City Financial