After-Repair Value (ARV) is the estimated market value of a property as if all planned renovations or improvements are completed. Unlike a prediction of future market value, ARV is calculated under the extraordinary assumption that the renovation is completed exactly as planned and under the hypothetical condition that the property is already in its completed state on the date of valuation.
For example, if you purchase a property for $350,000 and the value of the property as if renovations were complete is assessed at $500,000, the estimated ARV is $500,000.
Because ARV does not account for future market changes, timing matters. The longer the gap between determining ARV and listing or refinancing the property, the more likely market conditions may shift – positively or negatively. This is one of the many reasons why completing flip projects quickly is crucial for real estate investors.
For real estate investors, ARV is a crucial number in deal analysis because it helps you understand potential profit, funding needs, and whether a project is worth pursuing.
That ARV number guides almost every subsequent investment decision.
How ARV Is Determined
ARV reflects what the property could realistically sell for as if the planned renovations were already complete on the date of valuation – not what the market may be in the future. Lenders, appraisers, analysts, and real estate investors typically calculate ARV using:
- Comparable renovated sales (“comps”)
- Your planned scope and quality of work
- Market trends and neighbourhood demand
- The property’s features, layout, and potential resale appeal
Understanding ARV helps you determine:
- Your maximum purchase price
- How much you can spend on renovations
- Your projected profit
- Whether selling or refinancing makes more sense
Why ARV Matters for Real Estate Investors
ARV is the foundation of a profitable Flip or BRRR (Buy, Renovate, Rent, Refinance) strategy. Without a clear ARV, it’s challenging to evaluate whether a deal created enough equity, if the renovation budget makes sense, how much leverage you can safely take on, and what your exit strategy should look like.
ARV helps you understand both risk and opportunity, allowing you to compare deals more confidently and avoid overpaying.
It’s also important to understand what ARV does not represent.
ARV is calculated under the extraordinary assumption that the renovation is completed as planned and the hypothetical condition that the property is already in its completed state on the date of valuation. It does not forecast what the property will be worth weeks or months later when the renovation is actually finished.
Because market conditions can shift – either positively or negatively – it’s important to re-check comparables before listing or refinancing, especially if renovation timelines extend. This is one of many reasons completing flip projects efficiently is so critical.
Want help running the numbers? Try our free Flip Analyzer Tool designed for the Alberta and Ontario real estate markets to estimate ARV, renovation budgets, potential profit, and more. Additionally, our free Renovation Checklist can help you organize your scope of work and avoid missing key items that impact your ARV.
ARV vs As-Is Value: What New Real Estate Investors Often Miss
Many real estate investors confuse these terms:
- As-Is Value = what the property is worth today
- After-Repair Value = what the property could be worth as if the renovations were complete today (under a hypothetical condition and extraordinary assumption). ARV is not a projection of what the property will be worth once you finish the renovation weeks or months later. Actual market conditions at the time of listing may differ.
Traditional lenders focus almost entirely on the as-is value or purchase price, which limits the amount you can borrow.
ARV-based lenders, such as Calvert Home Mortgage, look at the potential of the property, not just the current condition.
How ARV-Based Lending Supports Strong Real Estate Deals
At Calvert Home Mortgage, we utilize ARV on Flip and BRRR mortgages, which helps you:
- Access higher loan amounts based on the value as if renovations were complete
- Reduce your upfront cash requirement, keeping more capital available
- Fund more of your renovation, carrying costs, or additional opportunities
- Move quickly on discounted or distressed properties
- Stay flexible if timelines or plans shift
ARV-based lending is especially powerful when you’re buying below market value or creating significant equity through improvements.
How ARV Fits into Flip and BRRR Financing
Whether you’re flipping a property or planning a BRRR strategy, your success often depends on buying at the right price, renovating with the right budget, and selling or refinancing at the right time.
ARV acts as the anchor for your success. It gives you a realistic sense of whether you’ll make a profit, how much cash you’ll need, what your returns might look like, and how much leverage you can safely take on.
Because ARV is central to both acquisition and exit planning, understanding it early in your analysis helps ensure your numbers and your strategy are realistic.
How Calvert Home Mortgage Used ARV to Support Real Estate Investor Success
When you’re flipping a property or completing a BRRR, you need financing that aligns with the value you’re creating, not just the property’s current condition. That’s why Calvert Home Mortgage integrates ARV into our free in-house valuations for Flip and BRRR mortgages.
Instead of lending solely on the purchase price or “as-is” value, we review:
- Your renovation scope and timeline
- Comparable renovated sales
- Neighbourhood demand and market conditions
- The property’s characteristics and after-repair potential
By evaluating the full potential of the project, we can structure financing that works with your investment strategy. This approach supports features such as:
- Low down payments (as little as $10K in AB & ON)
- Financing based on the value as if renovations were complete, not just today’s as-is value based on purchase price
- Interest-only, fully open terms to support short-term projects
- Fast closings, with no third-party appraisals required on properties up to $1.5M
- Flexibility if renovation timelines or scopes change.
Using ARV helps ensure your financing reflects the real value you’re building into the property. The result: more leverage, more liquidity, and more room to scale your business.
The Bottom Line: How ARV Supports Profitable Flip and BRRR Projects
ARV provides a clear picture of the estimated value your project could achieve if the renovations were complete today, exactly as planned, helping you assess whether the numbers support a profitable Flip or BRRR. When your financing aligns with the property’s completed value (ARV), you gain more leverage, keep more cash in your pocket, and scale your business with greater confidence.
Whether you’re implementing a Flip or BRRR strategy, understanding ARV helps you make smarter, faster, and more profitable decisions.
Ready to run the numbers on your next Flip or BRRR?
Whether you’re analyzing a potential deal or preparing for your next purchase, our team is here to support you with fast, flexible financing built for real estate investors.
Contact us today to discuss your next opportunity.
FAQs: ARV for Real Estate Investors
Q: What is ARV in real estate investing?
A: ARV (After-Repair Value) is the estimated value of a property as if renovations are completed. It helps real estate investors determine profit potential, renovation budgets, and exit strategies.
Q: How do you calculate ARV?
A: ARV is typically calculated using comparable renovated sales (“comps”), the renovation scope, market trends, and the property’s layout and features.
Q: Why is ARV important for flip and BRRR projects?
A: ARV estimates whether a deal is profitable, how much equity you can create, and how much financing you can access.
Q: Do all lenders use ARV?
A: No. Most traditional lenders use the purchase price or as-is value. ARV-based lenders, like Calvert Home Mortgage, consider the value of the property as if renovations were complete when providing Flip and BRRR financing.
Q: Does ARV predict what my property will be worth in the future?
A: No. ARV is not a future-looking or predictive value. ARV assumes the renovation is already complete on the day the valuation is performed. It does not account for market changes that may occur between the date of valuation and the date you actually list or refinance the property.
Because real estate markets can shift due to both micro and macroeconomic factors, real estate investors should reassess the market before listing or refinancing, especially if renovation timelines run long.
