ARV Analysis Step by Step: A Wholesaler's Guide
ARV — After Repair Value — is the number that makes or breaks every wholesale deal. Get it right and your buyers trust your analysis, make offers quickly, and close at your asking price. Get it wrong and you either leave money on the table or waste weeks marketing a deal nobody wants.
This guide walks through ARV analysis step by step, from pulling comps to presenting your findings to buyers. It is written specifically for wholesalers who need to produce reliable ARV estimates without being licensed appraisers.
Step 1: Define your subject property
Before pulling any comps, document your subject property's key characteristics:
- Property type: Single family, duplex, townhome, condo
- Bedrooms and bathrooms: Exact count, including any half baths
- Square footage: Living area (not lot size). Use tax records or MLS data, not Zillow estimates.
- Year built: Important for matching comps and estimating renovation scope
- Lot size: Matters more in suburban and rural markets than urban
- Current condition: Note specific issues — roof age, HVAC age, foundation concerns, cosmetic vs structural needs
- Notable features: Pool, garage (1-car vs 2-car), corner lot, waterfront, etc.
You need this baseline to select truly comparable properties. A 1,200 sqft 2-bedroom is not comparable to a 2,400 sqft 4-bedroom, even if they are across the street from each other.
Step 2: Pull comparable sales
Search for recently sold properties that match your subject on the key criteria. Here are the parameters, in order of importance:
Distance: start tight, expand if needed
Begin at 0.25 miles from the subject. This captures the immediate neighborhood and subdivision. If you find fewer than 3 good comps, expand to 0.5 miles. Maximum useful radius is 1 mile for most suburban markets, 0.5 miles for urban.
Recency: 6 months, extend to 12 maximum
Recent sales reflect current market conditions. Sales from 6+ months ago may not account for appreciation or market shifts. Start with 6 months. If you need more comps, extend to 12. Never go beyond 12 months — the data becomes unreliable.
Property type: match exactly
Single family to single family. Townhome to townhome. Do not mix types. A condo at $180/sqft in the same zip code as a single family at $150/sqft will skew your ARV.
Size: within 20% of subject
If your subject is 1,600 sqft, look for comps between 1,280 and 1,920 sqft. Larger differences require per-sqft adjustments that introduce uncertainty.
Bed/bath: within one
A 3/2 subject should use 3/2 or 3/1.5 or 4/2 comps. A 2/1 comp for a 4/3 subject is not useful regardless of proximity.
Condition: match the post-repair condition
This is the most commonly overlooked filter. ARV represents the value after renovation. Your comps should be properties that sold in renovated condition. An as-is distressed sale at $140K is not a comp for your subject's ARV even if it is next door. Look for comps described as "updated," "renovated," or "move-in ready" in the MLS remarks. For more on comp selection, see our comp selection guide.
Step 3: Analyze each comp
For each comparable sale, document:
| Data Point | Why It Matters |
|---|---|
| Sold price | The actual transaction price, not list price |
| Sold date | More recent = more relevant |
| Days on market | Quick sales suggest the price was at or below market; long DOM suggests overpricing |
| Price per square foot | Normalizes size differences between comps |
| Condition at sale | Renovated, cosmetic update only, or as-is |
| Notable differences from subject | Pool, garage, lot size, school district, flood zone |
Step 4: Make adjustments
No comp is a perfect match. Adjustments account for the differences between each comp and your subject. Common adjustments:
- Size: If the comp is larger, adjust downward. If smaller, adjust upward. Use the market's average price-per-sqft as the adjustment rate.
- Bedrooms/bathrooms: An extra bedroom typically adds $5,000 to $15,000 depending on the market. An extra bathroom adds $3,000 to $10,000.
- Garage: A 2-car garage vs 1-car adds $5,000 to $15,000. No garage vs 2-car is $10,000 to $25,000.
- Pool: Adds $10,000 to $25,000 in warm-climate markets. Can be neutral or negative in cold climates.
- Lot size: Significant differences (double the lot) may warrant $5,000 to $20,000 adjustments.
- Age/condition: A comp renovated to a higher standard than your planned renovation should be adjusted down.
The goal is to answer: "If this comp were identical to my subject, what would it have sold for?" Apply each adjustment to arrive at an adjusted comp price.
Step 5: Calculate your ARV
With 3-6 adjusted comp prices, you have several options:
Simple average
Add up all adjusted comp prices and divide by the number of comps. This works when your comps are similar in quality and proximity. Use our free ARV calculator for this method.
Weighted average
Give more weight to the comps that are closest in distance, most recent, and most similar in characteristics. A comp 0.1 miles away that sold last month should count more than one 0.8 miles away that sold 10 months ago.
Median
Use the middle value. This approach reduces the impact of outliers — one unusually high or low comp will not skew the result as much as with averaging.
For most deals, all three methods should produce ARVs within 5% of each other. If they diverge significantly, your comps may not be truly comparable and you should re-evaluate your selection.
Step 6: Sanity check your ARV
Before using your ARV for pricing decisions:
- Check the price-per-sqft. Is your ARV's implied $/sqft in line with the neighborhood average? If the area averages $150/sqft and your ARV implies $200/sqft, something is off.
- Look at active listings. What are comparable properties currently listed for? If your ARV is significantly above current asking prices, the market may have shifted.
- Consider days on market. If your comps all took 90+ days to sell, the ARV may reflect a price that requires patience. If you need a quick close, price conservatively.
- Account for market trends. In an appreciating market, older comps understate current value. In a declining market, they overstate it. Adjust your confidence accordingly.
Step 7: Present your analysis to buyers
A buyer receiving your deal email should be able to verify your ARV within minutes. Present each comp with the address, sold price, sold date, size, and how it compares to the subject. Let the buyer see your reasoning rather than just a number.
Include a map showing the subject property and each comp location. Proximity is immediately visible and builds confidence. Also show both your ARV and the resulting profit margin at your asking price so the buyer can evaluate the opportunity at a glance.
For a guide on presenting this data effectively, see our marketing package guide.
Related
- How to Calculate ARV
- How to Run Comps Like a Pro
- ARV vs ARR: Which Matters for Your Exit Strategy?
- Free ARV Calculator
- Deal Run Comp Analysis