ARV

After-repair value

After-repair value is what the property will appraise for once the planned work is finished, supported by closed sales of comparable finished properties. Every flip and every BRRRR refinance hangs on it: the hard-money loan sizes off it, the refinance sizes off it, and the profit is measured against it.

ARV = price per finished square foot of comparable sales × subject square footage

Worked example

A BRRRR bought at $155,000 with $55,000 of work targeting a $285,000 ARV refinances at 75% LTV, which is a $213,750 new loan.

Rental metric examples use the default $265,000 duplex at $2,650 monthly rent, 25% down and 6.75% over 30 years. Strategy and tax examples use the assumptions stated above rather than that rental deal.

The mistake to avoid

Setting ARV from active listings rather than closed sales. Sellers list at hope; appraisers work from what actually closed in the last six months, and the refinance follows the appraiser.

Where this is calculated

The brrrr calculator computes this from your own numbers and shows the arithmetic expanded. Buy, rehab, rent, refinance, repeat — cash left in the deal, capital recycled, and infinite returns handled properly.

Related terms

House hackingHouse hacking means living in part of a property and renting the rest — the other side of a duplex, spare bedrooms, or an accessory dwelling unit.

Back to the full glossary — 21 terms with formulas and worked examples.