# After-Repair Value (ARV): How Lenders Set It | KREC

*How lenders and appraisers set after-repair value, how to choose and adjust comparable sales, and how to build an ARV that survives the appraisal.*

## After-Repair Value: Building an ARV a Lender Will Believe

ARV caps the size of your flip loan, so an optimistic number can cost you real money. Here's how to build an after-repair value a lender will believe.

Short answer

After-repair value is what a property should be worth once your planned work is finished, based on recent sales of comparable renovated homes. Lenders use it to cap the loan, often at a percentage of ARV. A credible ARV leans on the most similar recent sales, adjusted for real differences, rather than the single best sale in the neighborhood.

Key points

- ARV caps the size of most flip loans.
- Use the most similar recent sales, not the best one.
- Adjust for real differences like size, beds and baths.

### What ARV is, and why lenders care

ARV is the value of the property after your scope of work is complete. On most fix-and-flip loans it sets the ceiling: the lender lends up to a set percentage of ARV, no matter what you paid. Inflate it, and the appraisal will cut your loan.

### Choosing comparable sales

- **Recent:** sold within the last few months where possible.
- **Close:** same neighborhood, ideally a short distance away.
- **Similar:** comparable size, bed and bath count, lot and style.
- **Renovated:** finished to the level your scope will deliver.

### Adjusting for differences

Adjust each sale toward your finished property: subtract for features it has that yours won't, and add for ones it lacks.

**ARV worksheet: Three comparable sales, illustrative**

|  | Sale price | Adjusted |
| --- | --- | --- |
| Comp 1: larger lot and garage | $425,000 | $415,000 |
| Comp 2: one fewer bathroom | $398,000 | $410,000 |
| Comp 3: added pool | $430,000 | $415,000 |
| **ARV used** |  | **$410,000** |

The adjusted sales average about $413,000. Using $410,000 leaves a margin for the appraiser's judgment.

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### Common ARV mistakes

- Anchoring on the single highest sale
- Comparing a mid-grade rehab to luxury finishes
- Ignoring days on market and price cuts
- Forgetting that the appraiser will choose their own comparables

For how ARV sizes the loan, see [fix-and-flip financing](https://keyrealestatecapital.com/blog/fix-and-flip-loans).

### Frequently asked questions

#### How do you calculate after-repair value?

Start with recent sales of renovated homes similar to yours, adjust each for differences like size, bedrooms and features, and settle on a value the adjusted sales support.

#### What percentage of ARV will a lender lend?

It varies by lender and experience. Many fix-and-flip programs cap the total loan somewhere around 65 to 75% of ARV.

#### Who decides the ARV on my loan?

The lender typically relies on an appraisal or valuation that estimates after-repair value from your scope of work and comparable sales.

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Everything you need to know about fix and flip financing, from loan terms to maximizing your profits on renovation projects.

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## Article Metadata
- **Headline:** After-Repair Value: Building an ARV a Lender Will Believe
- **Published:** 2026-10-27
- **Author:** Key Real Estate Capital

## Frequently Asked Questions

### How do you calculate after-repair value?

Start with recent sales of renovated homes similar to yours, adjust each for differences like size, bedrooms and features, and settle on a value the adjusted sales support.

### What percentage of ARV will a lender lend?

It varies by lender and experience. Many fix-and-flip programs cap the total loan somewhere around 65 to 75% of ARV.

### Who decides the ARV on my loan?

The lender typically relies on an appraisal or valuation that estimates after-repair value from your scope of work and comparable sales.

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