Question 1

What is the difference between an "As-Is" and an "ARV" appraisal?

Accepted Answer

An "As-Is" value represents the property’s current market worth in its present condition—usually distressed or dated. The ARV (After-Repair Value) is a prospective value that estimates what the property will be worth once a specific Scope of Work (SOW) is completed. Hard money lenders typically require both to determine the baseline risk and the total loan amount.

Question 2

How do you determine the ARV if the repairs haven't started?

Accepted Answer

We use a "Subject To" valuation method. We analyze your detailed renovation budget and floor plans, then compare your property to other recently sold homes in the same neighborhood that have already been renovated to a similar level of finish. We aren't just looking at the house next door; we are looking at the future version of your house.

Question 3

Can I use active listings as "comps" for an ARV appraisal?

Accepted Answer

While active listings help us understand current competition, they are not used as primary comparable sales. ARV appraisals rely on closed sales. Lenders require "settled" data because listing prices often reflect builder optimism rather than what a buyer is actually willing to pay.

Question 4

Why does the lender’s ARV sometimes come in lower than the investor’s estimate?

Accepted Answer

This usually happens due to "over-improvement." If an investor puts $100,000 of luxury finishes into a neighborhood where the ceiling for renovated homes is $400,000, the appraiser cannot give dollar-for-dollar credit for those upgrades. We help both parties identify where the "value ceiling" is for a specific zip code.

Question 5

What documents do I need to provide for a hard money appraisal?

Accepted Answer

A detailed Scope of Work (SOW) or line-item rehab budget.

Building plans (if adding square footage or changing the layout).

A list of specific high-end finishes (e.g., quartz counters, hardwood floors).

Access instructions for the property.

Question 6

Do you analyze the contractor's budget during the appraisal?

Accepted Answer

Yes. A key part of a hard money appraisal is verifying that the proposed budget is sufficient to achieve the desired result. If a borrower claims they will do a full studs-out remodel for $20,000, we flag that as a risk. Lenders rely on us to ensure the project is financially feasible and that the collateral is protected.

Question 7

How long does a fix-and-flip appraisal take?

Accepted Answer

We understand that hard money moves at the speed of business. While a traditional bank appraisal can take weeks, we prioritize fix-and-flip assignments. Typically, you can expect a completed, lender-ready report within 3 to 5 business days after the interior inspection is completed.

ARV Appraisals for Fix-and-Flip Real Estate

Hard Money Lender Appraisals: Protect Your Capital with Bulletproof ARV Valuations

Why Top Private Lenders Can’t Rely on Standard Appraisal Methods

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