ARV in one line
ARV is what the house sells for, fully renovated, to a retail buyer, today. Not the Zestimate. Not the tax assessment. Not what the seller thinks.
Comp selection rules
Use sold comps only, and require:
- Distance: within 0.5 miles in a suburb, 1 mile rural, 0.25 miles in a dense urban grid — never across a highway, school district line or subdivision boundary.
- Recency: sold in the last 90 days; stretch to 180 only if the market is thin, then adjust for trend.
- Similarity: ±20% square footage, same bed count, same story count, same lot type, built within ~10 years.
- Condition: the comp must be *renovated*. Comping to another distressed sale gives you an as-is value, not an ARV.
Take 3–5 comps, compute price per square foot, drop the outliers, and multiply the median by your subject's square footage. Sanity-check the result against the top of the neighborhood's recent range — ARV rarely exceeds the best sale on the block.
Rehab estimating without a contractor
| Scope | $/sq ft | Typical items |
|---|---|---|
| Light cosmetic | $15–$25 | Paint, carpet, fixtures, landscaping |
| Standard flip | $30–$45 | Kitchen, two baths, LVP throughout, HVAC |
| Heavy | $50–$85 | Roof, electrical, plumbing, foundation, layout changes |
Add line items on top for big-ticket surprises: roof $8k–$15k, HVAC $6k–$10k, sewer line $5k–$12k, foundation $10k–$30k.
MAO
MAO = (ARV × buyer margin) − Repairs − Your assignment fee
- 0.70 for competitive, on-market, retail-facing deals.
- 0.75 for off-market deals with a clean title and no competing offers.
- 0.80 for turnkey rental buyers in strong-rent markets who care about cash flow, not flip margin.
Worked example. ARV $220,000 · Repairs $40,000 · Fee $10,000. At 70%: (220,000 × 0.70) − 40,000 − 10,000 = $104,000. At 75%: (220,000 × 0.75) − 40,000 − 10,000 = $115,000 — the number that actually wins off-market contracts.
Run it instantly in the free fix and flip calculator.
The four mistakes that kill deals
- Using active listings instead of sold comps (sellers ask, buyers pay).
- Comping a 1,000 sq ft house to a 1,900 sq ft house on price-per-foot alone.
- Forgetting holding, closing and selling costs — 8–12% of ARV on a flip.
- Padding rehab so heavily that every offer you make is insulting and nothing ever gets signed.