ARV — After Repair Value — is what a property will sell for once it's fully renovated to the standard of your market. Every other number in wholesaling is derived from it, which is why an ARV that's 10% optimistic turns a $12,000 assignment fee into a dead contract.
The formula everyone quotes (and why it's not enough)
ARV = average price per square foot of renovated comps × subject square footage
That works only when your comps are truly comparable. Price per square foot alone is the single biggest source of bad ARVs, because a 900 sq ft house and a 2,400 sq ft house in the same neighborhood almost never share a $/sqft.
Step 1: Pull the right comps
Use sold comps only — not active listings, not pending, not Zestimates. Filters:
- Sold within the last 6 months (3 months in a fast-moving market)
- Within 0.5 miles in a city, 1 mile in suburbs, 3 miles rural
- Same school district and same side of any major road
- ±20% square footage
- ±10 years built
- Same story count, same bed count, ±1 bath
- Renovated condition — the comp should look like your house *after* the rehab
You want 3–5 that survive all of those. If you can only find one, your ARV is a guess.
Step 2: Adjust for differences
Appraisers adjust; wholesalers should too. Typical dollar adjustments in a $150k–$300k market:
- Extra full bath: +$6,000 to $12,000
- Extra bedroom (with square footage): +$8,000 to $15,000
- Garage vs carport vs none: +$5,000 to $12,000
- Finished basement: +$25–$45 per sq ft of finished area
- Pool: +$8,000 to $20,000 (negative in some markets)
- Corner lot on a busy road: −$5,000 to $15,000
Adjust the comp to look like your subject, not the other way around.
Step 3: Worked example
Subject: 1,400 sq ft, 3/2, 1-car garage, built 1968.
| Comp | Sold | Sq ft | Notes | Adjusted |
|---|---|---|---|---|
| A | $214,000 | 1,380 | 3/2, garage | $214,000 |
| B | $232,000 | 1,520 | 3/2, garage, extra bath | −$9,000 → $223,000 |
| C | $199,000 | 1,340 | 3/1, no garage | +$8,000 +$7,000 → $214,000 |
Adjusted range: $214,000–$223,000. ARV = $216,000 (weight the closest comp heaviest, and always take the conservative end).
Step 4: Sanity-check against the market
Three checks that catch 90% of bad ARVs:
- Days on market — if renovated comps sit 90+ days, discount your ARV by 3–5%.
- The ceiling test — if your ARV is the highest sale in the subdivision in 12 months, it's wrong.
- Buyer test — would a landlord pay this? A landlord's ARV is rent-driven and often 8–12% below a flip ARV.
The mistakes that kill deals
- Using Zestimate or an AVM as ARV. Automated values are trained on *current* condition and lag renovated sales.
- Comping across a highway, a school district line, or a flood zone boundary.
- Using flipped comps that included a garage conversion or added square footage your rehab won't include.
- Forgetting that ARV assumes a full renovation. If your buyer only does paint and carpet, they'll never hit that number.
What to hand your buyer
Every serious cash buyer wants the same packet: three sold comps with addresses, sale dates, sale prices, photos, and your adjustments in writing. When your ARV is defensible, your assignment fee stops being negotiated.