ARV — after-repair value — is the single most important number in house flipping. Get it right and you protect your profit. Get it wrong and you lose money. Here's how to calculate it correctly in South Florida.
ARV stands for after-repair value — the estimated market value of a property after it has been fully renovated. It's the foundational number in every fix-and-flip deal, every BRRRR calculation, and every hard money lending decision. In South Florida's market, knowing how to calculate ARV accurately is the difference between a profitable flip and a costly mistake.
Why ARV matters so much
ARV drives every other number in a flip deal. The 70% rule — the primary formula for determining maximum purchase price — is built on ARV:
Maximum Purchase Price = (ARV × 0.70) − Estimated Repair Costs
If your ARV is off by 10%, your maximum purchase price changes by 7% — and your entire profit margin can evaporate. A flip deal that looks like a $40,000 profit at one ARV might look like a $10,000 loss at a more accurate one. This is why experienced investors spend more time on ARV analysis than on any other part of deal evaluation.
How to calculate ARV in South Florida
ARV is determined by analyzing comparable sales (comps) — recently sold properties in the same neighborhood that are similar to what your subject property will look like after renovation. Here's how to do it correctly:
- Define your search area tightly. In South Florida's patchwork of neighborhoods, the right comps are often within 0.25–0.5 miles of the subject property. A comp two miles away in a different neighborhood is often meaningless.
- Match the condition. You're estimating value after renovation — so your comps should be fully updated, move-in-ready properties. Don't use distressed comps to estimate your renovated ARV.
- Match the key features. Bed count, bath count, square footage (±15%), garage vs. no garage, pool vs. no pool, lot size. Each difference requires an adjustment.
- Use recent sales. In South Florida's market, use sales within the last 3–4 months. Older comps in an appreciating market understate ARV; in a softening market, they overstate it.
- Pull at least 3–5 comps. One comp is not enough. Find 3–5 comparable sales and bracket your estimate with a low, mid, and high scenario.
Common ARV mistakes South Florida investors make
- Using Zillow's Zestimate as ARV. Zestimate is an algorithm-generated estimate — not a professional valuation. It routinely misses by 5–15% in South Florida's heterogeneous neighborhoods. Never use it as your ARV.
- Using active listings instead of sold comps. List prices are wishes. Sold prices are facts. ARV must be based on what properties actually closed for.
- Ignoring condition adjustments. A fully renovated comp in the same neighborhood may have granite countertops, new flooring, and updated bathrooms. If your planned renovation is more modest, your ARV should be adjusted downward.
- Assuming your renovation will add more value than it costs. In South Florida, some renovations add dollar-for-dollar value (kitchen, baths, curb appeal). Others add less than their cost (pools, additions in some markets). Know what the market rewards.
Getting ARV right in South Florida's market
South Florida's neighborhoods are highly localized — values can change street by street in some markets. A property two blocks from a major road may command $30,000 more than an identical property on the road. Gated vs. non-gated matters in some price ranges. School district boundaries matter in family markets. These nuances require local expertise to navigate correctly.
Our team pulls comp analyses for investor clients as part of our deal evaluation support. Use our Fix & Flip Calculator with your ARV and repair estimates to see the full profit projection on any deal. If you want help pulling comps on a South Florida property you're considering, reach out here. Also see our complete flip guide for beginners.
