What is ARV and Why is it Important?

Today we are going to answer the question “what is ARV and why is it important?” ARV, or After Repair Value, is a term every real estate investor should know. It’s the estimated value of a property after all repairs and upgrades are complete. In simple terms, it’s what your property could sell for when it’s in top-notch shape.

Why is it so important? It’s your road map to a profitable deal. Knowing the this number helps you figure out how much you should spend on a property and its repairs. It also shows if your investment is worth it in the end.

Here’s an example: Imagine you find a fixer-upper listed at $150,000. After some research, you learn similar homes in great condition sell for $250,000. That’s your ARV. Now, let’s say the repairs will cost $50,000. If you buy the property, your total investment would be $200,000. With an ARV of $250,000, you could make a $50,000 profit, before any extra costs like loan interest or closing fees.

It also matters when you’re looking for financing. Lenders often use ARV to decide how much they’ll loan you. The better your numbers, the more likely you’ll secure funding for your project.

In short, ARV is your guide to smart investing. It keeps your plans realistic and helps you stay on budget. Want to dive deeper? Check out our website today! 

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