How to Value a Fixer Upper: As-Is Value vs After-Repair Value
Every fixer upper has two values: what it is worth today in its current condition (as-is value) and what it will be worth after renovation (after-repair value or ARV). The gap between these two numbers represents the total opportunity in the deal — and determines whether it works for a wholesaler, flipper, or rental investor.
After-repair value (ARV)
ARV is the estimated sale price of the property after renovations are complete. Calculate it using comparable sales of renovated properties in the same area. This is the number flippers use to determine their resale price and the number that drives the 70% rule: MAO = ARV x 70% - Repairs.
As-is value
As-is value is what the property would sell for today, in its current condition, to a cash buyer on the open market. It is always lower than ARV because the buyer is accepting the cost and risk of renovation.
Calculate as-is value using: comparable sales of unrenovated properties (look for sales described as "investor special," "handyman special," or "as-is" in MLS remarks), or ARV minus repair costs minus investor profit margin.
The valuation gap
Opportunity = ARV - As-Is Value
Opportunity = Repair Costs + Holding Costs + Selling Costs + Profit
When to use each value
| Situation | Which Value | Why |
|---|---|---|
| Pricing your wholesale offer to seller | Below as-is value | Your offer must leave room for assignment fee + buyer profit |
| Marketing to flip buyers | ARV | Buyers evaluate based on what they can sell for after reno |
| Marketing to rental buyers | ARR + cap rate | Rental buyers care about cash flow, not resale |
| Insurance | As-is value | Insure for current replacement cost, not future value |
| Hard money lending | Both | Loan based on percentage of ARV, but as-is value affects LTV |
Common fixer upper valuation mistakes
- Using ARV comps for as-is pricing: A renovated comp at $300K does not mean your unrenovated subject is worth $300K minus repairs. As-is buyers factor in risk, time, and profit.
- Underestimating repairs: The gap between as-is and ARV must cover ALL costs: repairs, holding, selling, and profit. Underestimating repairs compresses margins. See our rehab scope guide.
- Ignoring neighborhood ceiling: A $50K renovation on a $150K house in a $200K ARV neighborhood means the ARV is $200K, not $200K + $50K. Properties have a ceiling based on the neighborhood.
Related guides
- How to Calculate ARV
- Estimating Repair Costs
- Determining Rehab Scope
- Maximum Allowable Offer
- How to Analyze a Flip Deal