Getting ARV right (or reasonably close) is the single most important step in analyzing a wholesale deal — every other number, including your offer to the seller, flows from it.
1. Understand what ARV represents
ARV is the estimated market value of a property after it has been fully renovated to a competitive, move-in-ready condition — not its current as-is value.
2. Gather comparable sales ("comps")
Look for properties that are:
- Sold within the last 3-6 months (more recent is better)
- Within roughly 0.5 miles of the subject property, ideally same school district/neighborhood
- Similar square footage (within about 10-20%)
- Similar bed/bath count
- Already renovated/updated, not another distressed sale
Sources include MLS access (via an agent), county records, or an AI tool that pulls comps automatically.
3. Calculate price per square foot
For each comp: Sale Price ÷ Square Footage = Price per Sq Ft. Average this across your 3-5 comps to get a blended price/sq ft for the area.
4. Apply to the subject property
Estimated ARV = Average Price per Sq Ft × Subject Property Square Footage
Example ARV Calculation
| Comp | Sale Price | Sq Ft | Price/Sq Ft |
|---|---|---|---|
| Comp A | $260,000 | 1,600 | $162.50 |
| Comp B | $245,000 | 1,500 | $163.33 |
| Comp C | $270,000 | 1,650 | $163.64 |
| Average | — | — | $163.16 |
If the subject property is 1,550 sq ft: ARV ≈ $163.16 × 1,550 ≈ $252,900 (estimate)
5. Adjust for differences
Raw price/sq ft averages don't account for everything. Adjust upward or downward for:
- Lot size — larger lots typically add value
- Garage/parking — add value if comps lack it
- Extra bed/bath — a comp with an additional bathroom the subject lacks should be adjusted down
- Location nuances — busy street, corner lot, or school zone differences
6. Cross-check with an automated valuation
Automated Valuation Models (AVMs) from sites like Zillow or Redfin can serve as a sanity check but shouldn't replace real comps — they're often inaccurate for distressed or unique properties.
7. Confirm condition assumptions
ARV assumes the renovation matches the finish level of your comps. If your comps are all high-end flips with quartz counters and your buyer plans a basic rehab, your true ARV (and resulting MAO) should be adjusted down accordingly.
8. Use AI-assisted ARV when speed matters
Manually pulling and adjusting comps for every lead takes time most wholesalers don't have. Offr AI surfaces an ARV estimate for each generated lead automatically, alongside a rehab range and MAO, so you can quickly triage which leads are worth a deeper manual comp check.
9. Avoid common ARV mistakes
- Using comps that are too far away or too old
- Comparing to another distressed/as-is sale instead of a renovated one
- Ignoring lot size or major feature differences
- Relying on a single comp instead of averaging several
10. Recalculate as new comps emerge
ARV isn't static — new sales close every month. If your deal analysis is more than 60-90 days old, or the seller is negotiating slowly, pull fresh comps before finalizing your offer or contract terms.
Once ARV is set, move on to estimating rehab costs and applying the MAO formula to determine your offer price.