What Is After-Repair Value (ARV)?

ARV is the single most important number in any cash offer. A cash buyer estimates what your house would be worth fully fixed up — based on recent sales of comparable renovated homes in your area — then works backward to determine what they can pay today.

The standard formula most cash buyers use is: Offer = (ARV × 70%) − Estimated Repair Costs. For example, if your home would be worth $200,000 renovated and needs $30,000 in repairs, a typical offer would be ($200,000 × 0.70) − $30,000 = $110,000.

The 30% gap between ARV and the 70% figure isn't pure profit — it covers renovation costs, holding costs (taxes, insurance, utilities during the rehab), closing costs on both the purchase and the eventual resale, and the investor's margin and risk. A legitimate buyer will show you their ARV, the comparable sales they used, and their repair estimate so you can check the math yourself.