Wondering what your dated LA home could sell for after a remodel? Or trying to price a flip without guessing? You are not alone. In Los Angeles, After Repair Value, or ARV, is the backbone of smart offers, funding, and profit on fixers. In this guide, you will learn what ARV means, how comps work in LA’s micro-markets, the adjustments that matter, and how to avoid costly mistakes. Let’s dive in.
What ARV means in Los Angeles
ARV is the expected market value of a property after planned repairs and renovations are complete. It is not a wish list number. It is an estimate grounded in sold comparable homes that match the finished product you plan to deliver. Buyers, lenders, and appraisers use ARV to set maximum purchase prices, size rehab loans, and forecast profits.
For LA fixers, ARV keeps you aligned with what renovated homes actually command in your exact neighborhood. It also prevents over-improving beyond the local ceiling, which you cannot recoup at resale.
Why ARV drives fixer offers
- Financing: Many hard-money lenders size loans as a percentage of ARV, not your purchase price. That affects your cash-to-close and leverage.
- Profit math: Buy price plus rehab, holding, and selling costs must fit below a realistic ARV to leave room for profit.
- Market fit: ARV forces an apples-to-apples match with nearby renovated sales, so your scope matches what buyers pay for on your block.
How to calculate ARV
At a high level, you can use either adjusted comparable prices or price per square foot.
- ARV by adjusted comps: Average the adjusted sale prices of 3 to 6 renovated comps that match your finished home.
- ARV by price per square foot: Multiply the average price per finished square foot of those comps by your planned finished square footage.
Step 1: Define the finished product
Be specific about the home you plan to sell, not the home you are buying. Confirm beds, baths, finished square footage, quality level, and whether you will add an ADU or make layout changes. Your comp set must reflect this as-improved product.
Step 2: Find the right LA comps
Use 3 to 6 recent sales of renovated homes that closely match your plan.
- Time window: Aim for 3 to 6 months in faster areas. Stretch to 9 to 12 months in slower pockets, then time-adjust.
- Geography: Prioritize the same block, tract, or the smallest practical radius, often within 0.25 to 1 mile. LA is full of micro-markets, so stay hyper-local.
- Property type: Match type exactly. Single-family comps for SFR ARV. Do not mix condos or duplexes.
- Size and rooms: Stay within about 10 to 20 percent of finished square footage and align bed-bath counts.
- Condition: Use comps that show finished, renovated condition similar to your planned scope.
Step 3: Make smart adjustments
Adjust each comp for:
- Square footage, beds, baths, and lot size differences
- Garage and parking, including any loss of parking from conversions
- Pool, view, and outdoor space
- Permitted ADUs or meaningful amenities
If comps closed more than a few months ago, apply a time adjustment using recent local trend data to reflect market movement through your target sale date.
Step 4: Choose your calculation method
- Use price per square foot when homes are similar in layout and finish quality.
- Use comp-by-comp adjustments when there are layout, quality, or amenity differences that $/sq ft does not capture.
A simple ARV flow
- Define the finished home (example: 3 bed, 2 bath, 1,400 square feet, mid-range renovation).
- Pull four sold, renovated 3-bed/2-bath comps in the same micro-market.
- Adjust for size, beds, baths, lot, parking, and time.
- Average the adjusted sale prices, then cross-check by $/sq ft multiplied by your future square footage.
LA factors that change comps and ARV
Micro-markets and boundaries
Value can shift block to block in Los Angeles. Focus on the smallest practical area tied to your subject property’s tract, school boundaries, and any planning overlays or historic districts. This prevents false comparisons that skew ARV.
Neighborhood “top” price
Every area has a renovation ceiling. High-end finishes beyond what nearby renovated comps show will not lift ARV above that local top. Identify the highest renovated sale nearby to understand the ceiling and plan your scope accordingly.
Permits and compliance
Permitted, inspected work supports value and comparability. Unpermitted additions or ADUs can reduce buyer confidence and ARV. Verify permits early and align your scope with what you can bring into compliance.
ADUs and lot use
In LA, a permitted ADU can improve ARV if nearby comps show pricing support. Illegal ADUs or unpermitted conversions often hurt value. Match your comp set to properties with similar, permitted improvements.
Parking and car-dependency
Parking materially affects price in many LA neighborhoods. A lost garage or lack of off-street parking can require a negative adjustment. Make sure your comps reflect similar parking situations.
Seismic and retrofit considerations
Older properties may face retrofit requirements or disclosures that affect marketability and costs. Factor these into your plan and your ARV margin.
Seasonality and market cycles
LA activity shifts through the year. When you use older comps, time-adjust your numbers to match your projected sale date and current momentum.
Common ARV pitfalls to avoid
- Using list prices or automated estimates instead of closed sales for ARV anchoring
- Over-improving beyond the neighborhood ceiling
- Ignoring time adjustments when the market is moving
- Underestimating rehab costs or skipping a contingency reserve
- Mixing property types, like comparing SFRs to condos or small-lot homes
- Not confirming permits, code status, or title issues early
Mitigate these risks by collecting multiple verified sold comps, getting written contractor bids with a contingency reserve, ordering a local CMA or appraisal when needed, and running a permit and title check at the start.
What to prepare for a cash offer in LA
If you want a fast, clean sale or need to test ARV assumptions through real offers, have this ready:
- Property address and parcel number
- Current photos: exterior, street view, kitchen, baths, bedrooms, living areas, and any visible defects
- Floor plan and accurate finished square footage
- Planned renovations and finish level, including any footprint changes or ADU plans
- Recent purchase details if relevant, plus any title items that affect timeline
- Any open permits, code issues, or known encumbrances
- Target closing window
What a strong offer package should include
Expect clear math and transparent assumptions that let you compare options.
- 3 to 6 adjusted comps with sale dates, distances, photos, and line-item adjustments
- ARV shown two ways: adjusted comp average and $/sq ft times future square footage
- A preliminary rehab cost outline or the assumption used for pricing
- Lender or buyer assumptions, like loan-to-ARV caps, holding and selling cost estimates, and target margin
- A recommended maximum purchase price based on your return goals
Who to have on your team
- Local agent with flip experience and current MLS access
- Licensed general contractor for bids and scope
- Appraiser familiar with your submarket if financing or validation is needed
- Permit expeditor or land-use specialist for ADUs or compliance issues
- Title and escrow teams that handle investor transactions
Bottom line
In Los Angeles, ARV only works if you use hyper-local, renovated comps and adjust for the details that drive price in your micro-market. Define the finished product, pick the right sales, make disciplined adjustments, and respect the neighborhood ceiling. If you want speed and certainty, package your info and invite real offers so the market can validate your plan.
Ready to move quickly on a fixer or sell as-is? Connect with the team at Acquire'd Real Estate for a fast, transparent cash offer and introductions to vetted lending and rehab partners.
FAQs
What is ARV in real estate and why it matters in LA?
- ARV is the estimated value after renovation, built from sold comps of similar finished homes; in LA’s micro-markets it guides offers, rehab scope, and financing.
How do I choose comps for ARV in Los Angeles?
- Use 3 to 6 recent, nearby sales of renovated homes that match property type, size, beds-baths, amenities, and condition, then adjust for differences and time.
Should I calculate ARV by $/sq ft or adjusted prices?
- Use $/sq ft when layouts and finishes are similar; use comp-by-comp adjustments when homes differ in design, quality, or amenities that $/sq ft misses.
How do permits and ADUs affect ARV in LA?
- Permitted, inspected work and permitted ADUs support value when local comps show it; unpermitted work often reduces ARV and narrows your buyer pool.
What are the most common ARV mistakes with fixers?
- Relying on list prices, ignoring time adjustment, over-improving past the neighborhood ceiling, underestimating rehab costs, and mixing non-comparable property types.
What should I gather to request a fast cash offer?
- Address and parcel number, clear photos, floor plan and square footage, planned scope and finishes, any permit or title issues, and your target closing window.
