# After Repair Value (ARV) Calculator Calculate ARV, the 70% rule maximum allowable offer, and projected flip profit from purchase price, repair budget, and selling costs. --- - **Canonical URL:** https://dothecalculation.com/calculators/after-repair-value-calculator - **Category:** Real Estate & Property - **Publisher:** Do The Calculation (https://dothecalculation.com) - **Cost:** Free, no account or sign-up required - **Privacy:** Runs entirely in the browser; inputs are never sent to a server - **Methodology:** https://dothecalculation.com/methodology --- ## After Repair Value (ARV) Calculator Calculate your maximum allowable offer using the 70% rule, and see the projected profit and margin on a specific purchase price — the two numbers every flip deal actually lives or dies on. - 70% rule maximum allowable offer, adjustable if your market runs differently - Projected profit and margin on the price you're actually considering - Selling costs built in, not just repair costs ## Quick Answer — What Is ARV and the 70% Rule? **ARV (After Repair Value)** is the projected market value of a property once renovations are complete, typically estimated from comparable recent sales of similarly renovated properties nearby. **The 70% rule** says your maximum offer should be no more than 70% of ARV minus repair costs — the formula is **Max Allowable Offer (MAO) = (ARV × 0.70) − Repair Costs**. **Quick reference:** a property with a $240,000 ARV needing $45,000 in repairs has a max allowable offer of ($240,000 × 0.70) − $45,000 = **$123,000**. Pay more than that and the deal's margin for profit and error starts disappearing fast. The remaining 30% of ARV isn't profit margin alone — it's the buffer that covers **closing costs, holding costs (loan interest, taxes, insurance during the rehab period), selling costs (agent commission, closing costs on the sale), and the actual profit** you're trying to make. That's why 70% is the standard starting point rather than something closer to 90% or 95%: there's real cost baked into that 30% before profit even enters the picture. ## How to Use This Calculator Enter your ARV estimate (from comparable sales of similarly renovated properties in the immediate area — this calculator doesn't pull comps automatically, so this number needs to come from your own research or an agent's comparative market analysis), your repair budget, the rule percentage you want to use (70% is standard, though experienced flippers in competitive markets sometimes go higher), the purchase price you're actually considering, and an estimated selling cost percentage (10% is a reasonable default covering agent commission plus closing costs). **Worked example:** $240,000 ARV, $45,000 repair budget, 70% rule, considering a $110,000 purchase price, 10% selling costs. Max Allowable Offer = ($240,000 × 0.70) − $45,000 = **$123,000**. Since the considering price of $110,000 is below the $123,000 MAO, this deal clears the 70% rule with **$13,000 of room to spare**. Projected selling costs = $240,000 × 10% = **$24,000**. Projected profit = $240,000 (ARV) − $110,000 (purchase) − $45,000 (repairs) − $24,000 (selling costs) = **$61,000**, a **25.4% profit margin** relative to ARV. **A second example, thinner margin:** $350,000 ARV, $60,000 repairs, 75% rule (a more aggressive rule used in a hotter or lower-competition market), considering a $190,000 purchase price, 8% selling costs. MAO = ($350,000 × 0.75) − $60,000 = **$202,500** — the $190,000 price clears it with $12,500 to spare. Selling costs = $350,000 × 8% = **$28,000**. Projected profit = $350,000 − $190,000 − $60,000 − $28,000 = **$72,000**, a **20.6% margin**. Notice this deal has a larger dollar profit but a thinner percentage margin than the first example — worth weighing both figures, not just the bigger number. For a full deal underwrite including holding-period financing costs and a detailed line-item rehab budget, pair this with the [rehab budget & renovation estimator](/calculators/property-flipping-rehab-budget-calculator) and the [house flipping calculator](/calculators/house-flipping-calculator). ## The Formula This Calculator Uses **Max Allowable Offer (MAO)** = (ARV × Rule %) − Repair Budget. **Projected Selling Costs** = ARV × Selling Cost %. **Projected Profit** = ARV − Purchase Price − Repair Budget − Projected Selling Costs. **Profit Margin %** = Projected Profit ÷ ARV × 100. **Offer vs. MAO** = Purchase Price − MAO. A negative number means your offer is under the max allowable offer (good — more margin); a positive number means you're offering above what the rule recommends (a signal to renegotiate, cut the repair budget, or walk). ## Why 70% Isn't a Universal Number The 70% rule is a widely used starting heuristic, not a law of physics, and treating it as rigid can cause you to pass on genuinely good deals or overpay on bad ones. In highly competitive, low-inventory markets, experienced flippers sometimes push to 75-80% of ARV, accepting a thinner margin because deal flow is scarce and their execution risk (accurate repair estimates, reliable contractors, fast timelines) is low. In markets with more uncertainty — volatile pricing, unreliable comps, or a flipper newer to estimating repair costs accurately — sticking closer to 65-70% or even lower provides more protection against the repair-cost overruns and holding-period delays that erode thin margins fastest. The rule percentage this calculator exposes as an adjustable input exists specifically so you can reflect your own market conditions and risk tolerance rather than treating 70% as gospel. What matters more than the exact percentage is understanding *why* the buffer exists — every point above your true selling-and-holding cost percentage is real profit margin, and every point below it is real risk. ## ARV Estimation Methods This Calculator Doesn't Do For You Getting ARV right is the single most consequential number in this entire calculation, and it's also the one this tool intentionally doesn't automate, because a bad ARV estimate makes every downstream number meaningless regardless of how precise the arithmetic is. The standard method is a **comparable sales (comps) analysis**: find 3-5 recently sold, similarly renovated properties within a half-mile to one mile, adjust for differences in square footage, bed/bath count, lot size, and condition, and arrive at a price-per-square-foot figure to apply to your subject property's finished square footage. A less common alternative is the **cost approach** — starting from current as-is value and adding the value the specific renovations are expected to contribute — but this tends to be less reliable than true comps, since renovation cost and renovation *value* are not the same thing (a $50,000 kitchen doesn't necessarily add $50,000 in resale value; see the [home renovation ROI calculator](/calculators/home-renovation-roi-calculator) for how wildly that relationship varies by project type). Whichever method you use, treat your ARV figure with appropriate humility — pulling it from a real agent's comparative market analysis or a licensed appraiser's opinion is meaningfully more reliable than an automated online estimate, especially in markets with limited recent comparable sales. ## What This Calculator Doesn't Account For This model uses a single blended selling-cost percentage and doesn't separately itemize financing costs (hard money loan points and interest during the holding period), which can meaningfully erode margin on a flip that takes longer than expected to complete and sell — a 6-month hold at 12% annual hard money interest on a $150,000 loan amount is $9,000 in carrying cost alone, easily consuming the difference between a good and mediocre deal. It also doesn't account for repair budget overruns, which are extremely common in real rehab projects — experienced flippers commonly build a 10-20% contingency into their repair budget specifically because initial estimates run low more often than they run high. Finally, this is a single-deal snapshot, not a portfolio or tax-planning tool — short-term capital gains on a flip held under a year are typically taxed as ordinary income, which meaningfully changes net-of-tax profit versus the pre-tax figure this calculator reports. ## Frequently asked questions ### Why is the 70% rule not just 100% minus expected profit margin? Because the 30% buffer covers real costs beyond profit alone — closing costs, holding costs during the rehab period, and selling costs when the property sells. Profit is what's left after all of those, not the entire 30%. ### Can I use a rule percentage other than 70%? Yes — this calculator lets you adjust it. Experienced flippers in competitive, low-inventory markets sometimes go to 75-80% accepting thinner margins, while newer flippers or higher-uncertainty markets often stay at 65-70% or lower for more protection. ### Does this calculator estimate ARV for me? No — ARV needs to come from your own comparable sales research or a real estate agent's comparative market analysis. This calculator uses your ARV estimate as an input, since it's the most consequential and market-specific number in the whole calculation. ### What if my offer is above the max allowable offer? It's a signal to renegotiate the price down, reduce the repair budget through a more conservative rehab scope, find a way to increase your ARV estimate with additional comps, or walk away from the deal — proceeding above MAO means accepting a thinner margin than the rule recommends. ### Does this include financing costs like hard money loan interest? No — this calculator uses a single blended selling-cost percentage and doesn't separately model financing costs, which can meaningfully affect a deal that takes longer than planned to complete and sell. ### Should I build in a repair cost contingency? Yes — real rehab budgets commonly run 10-20% over initial estimates. Consider padding your repair budget input by that amount, or at minimum treat the resulting profit margin as an upper bound rather than a guarantee. ## Related concepts - **After Repair Value (ARV)** — The projected market value of a property once renovations are complete, typically estimated from comparable recent sales of similarly renovated properties. - **Maximum Allowable Offer (MAO)** — The highest purchase price that preserves the target margin under the 70% rule, calculated as (ARV x rule%) minus repair costs. - **Comps (comparable sales)** — Recently sold, similarly renovated nearby properties used to estimate a subject property's after-repair value. ## Related guides - [House Flipping Guide: How to Calculate ARV, 70% Rule, and Profit Margin](https://dothecalculation.com/blog/property/house-flipping-guide) — Underwrite house flips with professional precision. Learn how to calculate after-repair value (ARV), maximum allowable offer (MAO), repair contingency, and financing drag. ## Related calculators - [House Flipping Calculator](https://dothecalculation.com/calculators/house-flipping-calculator) — Calculate house flipping profit potential, including maximum allowable offer, renovation budget, holding costs, and expected ROI for property flips. - [Rehab Budget & Renovation Estimator](https://dothecalculation.com/calculators/property-flipping-rehab-budget-calculator) — Itemize construction renovation budgets, material grade choices, and contingency buffers to plan rehab costs for property flipping projects. - [1031 Exchange Tax Deferral Calculator](https://dothecalculation.com/calculators/1031-exchange-tax-calculator) — Calculate capital gains tax liability, depreciation recapture, and adjusted basis when deferring taxes through an IRS Section 1031 exchange. - [BRRRR ROI Calculator](https://dothecalculation.com/calculators/brrrr-calculator) — Evaluate Buy, Rehab, Rent, Refinance, Repeat investment deals by calculating cash left in the deal, equity created, and overall return on investment. - [Broker & Agent Commission Split Calculator](https://dothecalculation.com/calculators/real-estate-agent-commission-calculator) — Calculate real estate listing and buying commissions and see how they split between agents and brokers on a home sale transaction. - [Gross Rent Multiplier (GRM) Calculator](https://dothecalculation.com/calculators/gross-rent-multiplier-calculator) — Estimate property value and calculate the Gross Rent Multiplier from purchase price and annual rental income for quick investment screening. --- _This calculator is for educational and planning purposes. Accurate use depends on a reliable ARV estimate from real comparable sales, which this tool does not generate. Repair cost overruns, financing costs, and market conditions can materially change actual outcomes — consult a real estate professional and a licensed contractor before committing capital to a flip._ --- _Source: [Do The Calculation](https://dothecalculation.com/calculators/after-repair-value-calculator). Quote freely with attribution and a link to this page._