ARV for wholesaling

A flipper who overestimates ARV by 6% makes less money than they planned. A wholesaler who overestimates ARV by 6% has nothing to sell. That difference shapes the entire approach, because you are not being paid for your opinion of value — you are being paid for a contract at a price someone else's model accepts.

The chain from ARV down to your offer, on a house with a $300,000 ARV and $40,000 of repairs:

Notice how little of that table you actually decide. Your fee is the only line with your name on it, and it is the last one — which is exactly why an ARV that is 5% optimistic ($315,000) implies a contract price $10,500 too high and eats a $10,000 fee entirely.

Comp to the renovation standard your buyer will actually do

Cash buyers in a given neighborhood tend to renovate to a consistent level, because they're all selling to the same buyer pool. Find two or three finished flips that have sold in the area in the last six months and use those — they are the truest possible comp, since they are literally the product your buyer will produce.

Use the median, then step down a notch

On a wholesale deal, quoting the median is already slightly aggressive because your buyer will discount for the risk they're taking on an unseen interior. Working from the median minus a few percent, or from the second-lowest comp, builds in the gap between your estimate and theirs before it becomes an argument.

Widen the repair contingency instead of narrowing the ARV

The unknown on a sight-unseen deal is condition, and condition lives in the repair line, not the ARV line. A $40,000 visual estimate with a $10,000 contingency is more honest than a $40,000 estimate paired with an ARV you've quietly shaded down to compensate — and it survives contact with a buyer's walkthrough, which the shaded ARV doesn't.

Photograph and note what you can see

Roof age, siding, windows, the electrical service, any visible foundation movement, and the general condition of the street. None of this changes the ARV, but all of it changes the credibility of your repair number, which is the number that will be challenged.

A buyer's list opens dozens of these a week. What gets a deal read is not enthusiasm, it's the ability to verify your numbers in ninety seconds without leaving the email:

• The address and the contract price. Lead with them. A deal that hides the price until paragraph four reads as a deal with a problem.
• Three to five comps with addresses, sale prices, dates and square footage. Not a screenshot of a valuation estimate. Addresses, so they can check.
• Your ARV and how you got there — median price per foot times square footage, stated plainly, with the range.
• A repair estimate with a scope, not a single number. "$40,000: kitchen, two baths, floors, paint, HVAC" invites a correction; "$40,000" invites a phone call you'll lose.
• Photos of everything you were able to see, including the ones that don't help you. Omitting the bad photo is the fastest way to become the wholesaler nobody opens twice.

The number itself is in how much should a wholesaler offer, the formula behind it in how to calculate MAO, and what to charge in what is a good wholesale spread. For the ARV method itself, start with how to calculate ARV.