Understanding ARV: The Key to Successful House Flipping

If you're new to flipping houses, one of the first terms you’ll hear is ARV, which stands for After Repair Value. ARV is the estimated value of a property after all the renovations are complete. Knowing the ARV is important because it helps you figure out how much you can sell the house for and whether the flip will be profitable.

Calculating ARV isn't complicated, but it does take some research. Start by looking at similar homes, called comps, in the same neighborhood that have recently sold. These homes should be similar in size, style, and condition to your property after the repairs. Compare their selling prices to estimate your own home's ARV.

Why does ARV matter? It helps you decide how much to pay for a property and how much to spend on repairs. For example, if a home's ARV is $200,000, you should aim to buy it and do repairs for less than $140,000 (considering costs like repairs, fees, and profit margin).

Understanding ARV helps you avoid overpaying and ensures you have room for profit. So, before making any big decisions, take time to research and calculate your ARV accurately.