After-Repair Value is the number every fix-and-flip loan is sized against. Get it wrong by 5% and your profit margin disappears. Get it wrong by 10% and you're paying out of pocket to keep the project moving.

Here's how an experienced investor calculates ARV on a Phoenix property — using a real anonymized deal we funded in Q4 2025.

The deal

A 3-bedroom, 2-bath, 1,420-square-foot home in a Phoenix neighborhood. Purchase price: $295,000. Rehab budget estimated at $70,000. Closing costs and carry estimated at $25,000. The investor wanted to know if the deal would clear $40K profit at minimum.

To figure that out, we needed to know the ARV.

Step 1: Define your comp criteria — strict

ARV is a number derived from comparable sales. The discipline of choosing comps correctly is what separates accurate ARV from optimistic ARV.

For our Phoenix deal, we pulled comps that matched these criteria:

  • Same submarket. Within 0.5 miles of subject property. Phoenix is geographically large; values can shift dramatically over a mile.
  • Sold within 90 days. Real estate moves fast. A comp from 6 months ago may not reflect current market.
  • Same bed/bath count. 3/2 only. A 4/2 isn't a comp even if it's the same square footage.
  • Square footage within ±15%. Our subject was 1,420 sf. Comps must be 1,200-1,640 sf.
  • Renovated condition. This is the critical filter. We're trying to predict what the subject will sell for AFTER renovation. Comps must be in equivalent renovated condition.
  • Same lot characteristics. Single-family detached, similar lot size (within ±25%).

Step 2: Pull the data

We used the MLS to pull every closed sale meeting those criteria. Six properties came back. We threw out two: one had been a partial commercial conversion, one had been bank-owned and likely sold below market. That left us four valid comps.

Here are the four sales (anonymized):

  • Comp A: 3/2, 1,380 sf, sold $462,000 (12 days ago)
  • Comp B: 3/2, 1,510 sf, sold $478,000 (45 days ago)
  • Comp C: 3/2, 1,440 sf, sold $471,000 (28 days ago)
  • Comp D: 3/2, 1,295 sf, sold $452,000 (76 days ago)

Step 3: Adjust for differences

You don't just average the four numbers. You adjust each comp for differences from the subject property.

Square footage adjustment. The Phoenix metro typically supports a price-per-square-foot adjustment of $80-120/sf for differences in livable area. We used $100/sf as a reasonable midpoint.

  • Comp A is 1,380 sf vs subject 1,420 sf. Comp is 40 sf smaller, so add $4,000 to its sale price for comparison: $466,000
  • Comp B is 1,510 sf, 90 sf bigger. Subtract $9,000: $469,000
  • Comp C is 1,440 sf, 20 sf bigger. Subtract $2,000: $469,000
  • Comp D is 1,295 sf, 125 sf smaller. Add $12,500: $464,500

Time adjustment. The Phoenix market in Q4 2025 was rising about 0.4% per month. Adjust older comps upward.

  • Comp A: 12 days old → no adjustment
  • Comp B: 45 days old (1.5 months) → +0.6%, add $2,800: $471,800
  • Comp C: 28 days old (~1 month) → +0.4%, add $1,900: $470,900
  • Comp D: 76 days old (~2.5 months) → +1.0%, add $4,600: $469,100

Lot/feature adjustments. Comp A had a pool, subject did not. Subtract $15,000 for pool premium: $451,800. Other comps were equivalent. (You'd similarly adjust for unique features the subject has that comps don't, or vice versa.)

Step 4: Calculate the adjusted average

After adjustments, our four comps are at:

  • Comp A: $451,800
  • Comp B: $471,800
  • Comp C: $470,900
  • Comp D: $469,100

Adjusted average ARV: $465,900

We rounded down to $465,000 to be conservative.

Step 5: Stress test against listings

The MLS shows what's already sold. To make sure your number isn't optimistic, also pull active listings that match your comp criteria.

In our case, three active 3/2 renovated listings in the same submarket, similar size:

  • Active 1: $479,000, listed 18 days
  • Active 2: $475,000, listed 31 days
  • Active 3: $469,000, listed 9 days

These tell us:

  • Sellers are listing in the $469K-479K range (consistent with our $465K ARV — slightly higher because list prices typically come down 1-2% before close)
  • Days on market is moderate (9-31 days), suggesting healthy demand at this price point
  • Our $465K ARV is realistic, not aspirational

If actives had been listed in the $440K-450K range, we would have lowered our ARV to $448K. The market would be telling us the seller side has weakened.

Step 6: Reality-check with a licensed appraiser

For deals over $500K or in unfamiliar submarkets, pay $400-600 for a pre-purchase appraisal. The appraiser uses the same comp methodology but has access to off-market data, expired listings, and submarket trend analysis you don't.

For our Phoenix deal at $295K purchase, the investor used our internal ARV analysis and skipped the formal appraisal at this stage (Grand Funding orders one as part of the loan process anyway). For a $750K Scottsdale deal, we'd order one upfront.

Step 7: Run the deal math

With ARV at $465,000:

  • ARV: $465,000
  • − Purchase: $295,000
  • − Rehab: $70,000
  • − Carrying (6 months): $25,000
  • − Selling costs (6%): $27,900
  • = Profit: $47,100

The investor wanted to clear $40K minimum. The deal cleared $47K. They moved forward.

We funded the loan at 90% of ARV ($418,500), which covered the entire purchase + rehab. The investor put in carrying costs and closing costs only — about $30,000 cash in the deal.

What experienced investors get wrong

Over-relying on Zillow. Zillow Zestimates use algorithmic comps that miss neighborhood-specific factors. Use the MLS, not Zillow, for ARV math.

Single-comp ARV. "I saw a renovated one sell for $490K so my ARV is $490K." No. One sale isn't a market signal. Get four valid comps minimum.

Ignoring time adjustments. A comp from 6 months ago in a fast-moving market is meaningfully different from a comp from 30 days ago. Adjust or exclude.

Wishful thinking on rehab quality. Your renovation might come out beautifully — or might come out average. ARV math should assume average, not best-case. Save the best-case for upside.

No buyer profile. If your ARV implies the buyer is using FHA financing, your renovation has to clear FHA standards (no peeling paint, working everything, no health/safety issues). If it doesn't, your ARV is wrong.

The 24-hour rule

When we underwrite a fix-and-flip at Grand Funding, we go through this process in about 4 hours. You get a term sheet within 24 hours of submitting your deal — sometimes the same day. The math discipline is what makes the speed possible.

Have a Phoenix deal you want underwritten? Call (602) 935-0371. Logan personally reviews every fix-and-flip deal and can give you a real-numbers term sheet in 24 hours.

Related reading: What is ARV? (Quick definition) · What is LTV? · Phoenix Fix & Flip Loans · How to Underwrite a Phoenix Fix and Flip