Deal Analysis
ARV Calculator
Estimate after-repair value and maximum allowable offer for a fix-and-flip or BRRRR deal.
Calculation breakdown
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How rental property returns work
After-repair value, or ARV, is the estimated value of a property once all renovations are complete. It is the foundation of fix-and-flip and BRRRR investing because it tells you what the property will be worth when you sell or refinance. The most reliable way to estimate ARV is the comparable sales method: find recently sold properties that are similar in size, condition, and location, calculate their average price per square foot, and multiply that by your subject property square footage. The formula is ARV = comparable average price per sqft × subject property sqft. Once you have an ARV, you can work backward to a maximum allowable offer, or MAO — the most you can pay for the property while still leaving room for profit. The most common guideline is the 70% rule: your maximum offer equals ARV multiplied by 70%, minus the rehab cost. The formula is MAO = ARV × (rule percent / 100) − rehab. The remaining 30% covers rehab, holding costs, closing costs, and your profit margin. If your rehab and carrying costs are lower, you can use a higher percentage; if they are higher, you should use a lower one. The 70% rule is a conservative guideline, not a law. In hot markets with strong appreciation, investors sometimes stretch to 75% or 80%. In slower markets or on properties with major rehab, 65% may be safer. The rule also assumes you have accurate rehab and ARV estimates — garbage in, garbage out. Always validate your comps carefully. Use recent sales (ideally within 90 days), similar square footage (within 15–20%), and the same neighborhood. A single outlier comp can distort your ARV and lead you to overpay. The ARV and MAO give you a disciplined ceiling on your offer so you do not let emotion drive your purchase price.
Worked example
You are evaluating a 1,400 sqft property that needs $35,000 in rehab. Comparable sales in the neighborhood average $165 per square foot.
ARV = $165 × 1,400 = $231,000. Using the standard 70% rule: MAO = $231,000 × 0.70 − $35,000 = $161,700 − $35,000 = $126,700.
That means your maximum allowable offer is about $127,000. If you can buy at or below that price, the deal leaves roughly 30% of ARV to cover rehab, holding costs, closing, and profit. If the asking price is $150,000, you would need to negotiate down or walk away — paying above MAO eats your margin and increases risk.
Frequently asked questions
What is the 70% rule in real estate?
The 70% rule says your maximum allowable offer should be no more than 70% of the after-repair value minus the rehab cost. The remaining 30% covers rehab, holding costs, closing costs, and profit. It is a conservative guideline, not a law — some investors stretch to 75% in hot markets or use 65% in riskier ones.
How do I estimate ARV accurately?
Use the comparable sales method. Find recently sold properties (ideally within 90 days) that are similar in size (within 15–20%), condition, and location. Calculate their average price per square foot and multiply by your subject property square footage. Avoid outliers and distressed sales that do not reflect the renovated condition.
Can I change the rule percentage from 70%?
Yes. The calculator lets you edit the rule percentage. If your rehab and holding costs are low, you might use 75% or 80%. If the rehab is extensive or the market is slow, 65% may be safer. Adjust it to match your actual cost structure and risk tolerance.
What is the difference between ARV and MAO?
ARV (after-repair value) is what the property will be worth once renovated. MAO (maximum allowable offer) is the most you should pay to leave room for rehab, holding costs, and profit. MAO is derived from ARV using the rule percentage minus rehab cost.
Does the ARV calculator account for holding and closing costs?
The 70% rule implicitly builds in a buffer for holding and closing costs within the remaining percentage. This calculator focuses on ARV and MAO. For a detailed fix-and-flip analysis including line-item holding and closing costs, use the fix-and-flip calculator after screening with this tool.
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