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Finance Calc Kit
Real estate

After Repair Value

Calculate the After Repair Value (ARV) and estimate the Maximum Allowable Offer (MAO) for real estate investment and house flipping using the 70% rule.

Property acquisition and rehab

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After-repair value method

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Target offer criteria

%

Estimated after-repair value (ARV)

$250,000.00

Maximum allowable offer (MAO)

$135,000.00

Flip analysis

Expected profit$55,000.00
Projected ROI28.2%
Total capital invested$195,000.00

ARV calculation details

Open to see how ARV, MAO, profit, and ROI are derived from your inputs.

  1. After-repair value (ARV)

    ARV=Direct Estimate\text{ARV} = \text{Direct Estimate}

    Estimated resale value after renovations: $250,000.00.

  2. Maximum allowable offer (MAO)

    MAO=(ARV×Target %)−Renovation Costs\text{MAO} = (\text{ARV} \times \text{Target \%}) - \text{Renovation Costs}

    ($250,000.00 x 70%) - $40,000.00 = $135,000.00.

  3. Expected profit

    Profit=ARV−Purchase Price−Renovation−Other Costs\text{Profit} = \text{ARV} - \text{Purchase Price} - \text{Renovation} - \text{Other Costs}

    $250,000.00 - $150,000.00 - $40,000.00 - $5,000.00 = $55,000.00.

  4. Return on investment (ROI)

    ROI=Expected ProfitTotal Capital Invested×100\text{ROI} = \frac{\text{Expected Profit}}{\text{Total Capital Invested}} \times 100

    $55,000.00 / $195,000.00 = 28.21%.

Report tool

How the after-repair value calculator works

This tool estimates the after-repair value (ARV) of a flip or rental rehab project, then applies the 70% rule to calculate a maximum allowable offer (MAO). Enter purchase price, renovation budget, holding costs, and either a direct ARV estimate or comparable sales. All math runs in your browser.

ARV is the expected resale price after renovations are complete. House flippers use it with the MAO formula to avoid overpaying. For general investment return math, try the ROI calculator. To compare financing scenarios on a finished property, open the mortgage comparison calculator. To turn ARV and repair costs into a purchase offer, use the what to offer on a house calculator.

ARV and MAO formulas

When using comparable sales, average the price per square foot from recent sold properties and multiply by your target home size:

ARV=Average Comp Price per Sq Ft×Property Size\text{ARV} = \text{Average Comp Price per Sq Ft} \times \text{Property Size}

The 70% rule sets a ceiling on what you should pay, leaving room for rehab costs and profit:

MAO=(ARV×Target %)−Renovation Costs\text{MAO} = (\text{ARV} \times \text{Target \%}) - \text{Renovation Costs}

Expected profit subtracts all cash invested from ARV, and ROI divides that profit by total capital deployed.

Worked example: $250,000 ARV with 70% rule

Consider a property purchased for $150,000 with $40,000 in renovations and $5,000 in holding costs. You estimate ARV at $250,000 using the direct method and apply a 70% target:

  1. ARV: $250,000
  2. MAO: ($250,000 x 70%) - $40,000 = $135,000
  3. Total invested: $150,000 + $40,000 + $5,000 = $195,000
  4. Expected profit: $250,000 - $195,000 = $55,000
  5. ROI: $55,000 / $195,000 = 28.21%

Using comparable sales for ARV

Select three recently sold homes with similar beds, baths, neighborhood, and condition after renovation. Divide each sale price by its square footage, average those values, then multiply by your subject property size. Adjust for lot differences, garage spaces, or premium finishes before relying on the result.

Frequently asked questions

What is after-repair value (ARV)?
ARV is the estimated market value of a property after all planned renovations are complete. Investors use it to size purchase offers and project resale profit.
What is the 70% rule in real estate?
The 70% rule suggests you should pay no more than 70% of ARV minus renovation costs. The remaining 30% covers rehab, holding costs, closing fees, and profit margin.
What is maximum allowable offer (MAO)?
MAO is the highest price you should offer on a property given your ARV estimate, renovation budget, and target percentage. This calculator computes MAO as (ARV x target %) minus renovation costs.
Should I use direct ARV or comps?
Use direct ARV when you have a broker price opinion or appraisal. Use comps when you want an objective market-based estimate from recent sold properties in the same area.
Are the results stored?
No. Changing the fields only updates the page URL so you can copy and share your inputs.

Resources and references

The formulas and methods in this calculator were checked against these independent sources.