ARV is used primarily in fix-and-flip and BRRRR strategies to determine how much to pay and borrow.
Hard money lenders typically lend up to 70% of ARV. If ARV is $300,000, max loan = $210,000. This covers acquisition + rehab if you buy correctly.
Max Offer = ARV × 70% − Estimated Rehab Costs
ARV is estimated using comparable sales (comps) from the same neighborhood within the last 3–6 months for similar size, condition, and features.
Related Terms
LTV
Loan-to-Value — loan amount as a percentage of the property's appraised value.
BRRRR
Buy, Rehab, Rent, Refinance, Repeat — a strategy to recycle capital into multiple properties.
Loan-to-Cost (LTC)
Loan amount as a percentage of total project cost (acquisition + rehab), used in construction and fix-and-flip financing.