After-Repair Value (ARV)

ARV is the projected market value of a property after planned renovations or repairs are completed, used by bridge and rehab lenders to size loans on value-add deals. Lenders typically cap loans at 65–75% of ARV, which lets a borrower finance a larger share of acquisition and renovation costs than as-is value alone would support.

Formula: ARV = Comparable Sales Value of Property in Renovated/Stabilized Condition

ARV underpins fix-and-flip and value-add bridge lending because it lets lenders and borrowers underwrite to what the asset will be worth once the business plan is executed, not just what it's worth today in distressed or below-market condition. An appraiser or broker price opinion typically derives ARV using recently sold, renovated comparable properties in the same submarket.

Because ARV is a projection rather than a current fact, lenders manage the risk two ways: capping the ARV-based loan percentage (commonly 65–75%) and layering in an as-is LTV and LTC cap simultaneously, so the loan is sized to the most conservative of the three tests. Renovation funds are usually held back and released via a draw schedule as work is completed and inspected, rather than disbursed in full at closing.

Borrowers should be cautious of ARV estimates that rely on speculative or stale comps — overstated ARV is one of the most common ways bridge borrowers end up over-leveraged relative to true exit value, which can create refinancing problems if the market softens before the renovation is complete.

Get matched to lenders · Analyze a deal with these numbers · Find matching lenders