Why accurate ARV estimation matters

ARV is the most important number in a fix and flip deal. A $20,000 ARV overestimate on a $300,000 property can turn a projected $40,000 profit into a $20,000 loss — or worse. Overestimating ARV is the single most common mistake among new flippers.

How to run comparable sales (comps)

Use MLS data (via a real estate agent), Zillow, Redfin, or Realtor.com. Filter for properties that match these criteria:

Within ½ mile of your subject property (or 1 mile in rural areas)
Same number of bedrooms and bathrooms (±1 bath is usually acceptable)
Similar square footage — within 15–20%
Sold within the last 90 days
Same property type — single-family, not condo or multi-family
Similar condition — renovated comparable to your planned finish level

How to adjust for differences

No two properties are identical. Common adjustments real estate professionals use:

Bathroom difference: $5,000–$15,000 per bathroom
Square footage difference: $30–$80 per square foot depending on market
Garage presence: $10,000–$30,000
Lot size: $5,000–$20,000 for meaningful differences
Condition: $10,000–$40,000 for fully renovated vs. dated

Use the average — not the highest sale

Use the average of your comps, not the highest comparable sale. Buyers and appraisers do not chase top-of-market comparables. Your property must appraise at your ARV for the buyer to get financing — so price it to appraise, not to hope.