ARV calculator (after-repair value & 70% rule)

ARV calculator — after-repair value & 70% rule

ARV (After-Repair Value) is the projected market value of a property after all planned renovations are complete. It's the foundation of every fix-and-flip and BRRRR underwriting model — all other numbers depend on getting this estimate right.

The 70% rule

The industry-standard maximum offer formula for fix-and-flip:

Max purchase price = ARV × 0.70 − rehab costs

The 30% buffer covers: estimated rehab overruns (10–15%), closing costs on purchase and sale (3–5% each), holding costs (financing, taxes, insurance, utilities), real estate commissions, and the target profit margin.

Profit projection

Actual profit accounts for all cost categories:

Profit = ARV − purchase − rehab − holding − closing (buy) − selling costs

Where selling costs include agent commission (typically 5–6%) and seller-paid closing costs. This is the number that matters — not spread from ARV to purchase price, which ignores the full cost stack.

ROI calculation

ROI = profit / (purchase + rehab + holding) × 100

This is the return on total invested capital, not just the down payment. If using hard money (10% down), your cash ROI would be much higher — but that leverage also magnifies losses if the deal underperforms.

Deal viability signals

Most experienced flippers want: profit ≥ 15% of total project cost, absolute profit ≥ $30,000–$50,000 (to justify the effort and risk), and purchase price ≤ 70% rule max. All three together indicate a viable deal. If the 70% rule works but profit is $15,000 on a 6-month project, the time/risk ratio may not justify the deal.