After Repair Value (ARV) is the cornerstone valuation metric for value-add real estate investors, house flippers, and hard money underwriters. It represents the estimated market price a property will command once its full scope of work (SOW) — such as kitchen/bath remodeling, roof replacement, HVAC modernization, and cosmetic finishes — is completed to neighborhood standards.
Appraisers and investors establish ARV by analyzing renovated comparable sales ("comps"): nearby properties of matching square footage, bed/bath count, and lot size that have sold in turnkey condition within the past 90 to 180 days.
To protect against market shifts, closing costs, and contractor budget overruns, disciplined investors underwrite acquisitions using The 70% ARV Rule: never paying more than 70% of the projected ARV minus estimated renovation costs.