ARV stands for after-repair value: the estimated market value of a property once all planned renovations are complete. It is the anchor number in a fix-and-flip or BRRRR deal, because both your profit and your loan are measured against it.
How ARV is used
Investors estimate ARV from comparable sales of similar, already-renovated properties nearby. Hard money lenders then lend against it — commonly up to about 70-75% of ARV including the rehab budget — so a credible ARV is what unlocks leverage. The popular 70% rule (max offer = 0.70 times ARV minus rehab) uses ARV to set a disciplined purchase price.
Why it matters
Get ARV wrong and the whole deal is wrong: an inflated ARV overstates profit and can leave you over-leveraged, while a conservative ARV protects you. Because so much rides on it, lenders order their own valuation rather than take the borrower's number.