What is After-Repair Value (ARV)?

ARV is a forecast, not a current valuation. An appraiser works from comparable sales of properties that are already finished to the standard your scope of work describes, in the same submarket and ideally within the last three to six months. That is why the scope of work matters as much as the purchase price: an appraiser cannot credit finishes your budget does not pay for.

It matters because most fix-and-flip lending is sized against ARV rather than against what you paid. A deal can be comfortable on purchase price and still fail underwriting if the ARV does not support the exit, and the gap usually shows up in one of three places — comps that are not really comparable, a scope that will not produce the finish level those comps reflect, or a timeline that puts the sale into a different market than the comps came from.

Two checks are worth doing before an appraiser ever sees the file. Pull the comps yourself and ask whether a buyer would genuinely cross-shop them against your finished property. Then run the exit at a value below your ARV and see whether the deal still works; if it only works at the top of the range, the margin is in the forecast rather than in the project.