Fix-and-Flip Loans: Up to 65% ARV Explained
This article is provided for informational purposes only and should not be considered financial advice, legal advice, or a recommendation to make any financial decision.
One of the most common questions we hear from real estate investors is: “How much can I actually borrow on a fix-and-flip loan?” The answer almost always comes down to After-Repair Value (ARV) and the 65% ARV rule.
At Property Flip Loan, we specialize in fix & flip loans across Maryland, and we typically lend up to 65% of the After-Repair Value. In this article, we’ll explain exactly what ARV means, how the 65% rule works, why it matters, and how you can use it to your advantage.
What Is After-Repair Value (ARV)?
After-Repair Value (ARV) is the estimated market value of a property after all planned renovations are completed. It is the number that tells lenders and investors what the finished product should be worth.
For example:
You buy a house for $250,000
You plan to invest $80,000 in renovations
After repairs, the home should be worth $450,000
In this case, the ARV is $450,000.
How 65% ARV Works in Fix-and-Flip Loans
Most reputable hard money lenders will lend up to 65% of the ARV. This is a conservative lending standard that protects both the lender and the borrower.
Using the example above:
ARV = $450,000
65% of ARV = $292,500
This means we could potentially finance up to $292,500 toward the purchase and rehabilitation of the property.
We also offer up to 85% Loan-to-Cost (LTC) on strong deals, which is often calculated as the lesser of 65% ARV or 85% of total project cost (purchase price + rehab).
Why 65% ARV Is Important
Lending at 65% ARV creates a built-in equity cushion. It gives the investor room for unexpected costs and protects the lender in case the final sale price is slightly lower than the projected ARV.
This conservative approach is one of the reasons experienced flippers prefer working with direct hard money lenders who understand real-world rehab numbers.
Loan-to-Value (LTV) vs. ARV
It’s easy to confuse Loan-to-Value (LTV) with ARV-based lending. Traditional banks usually lend based on the current (as-is) value of the property. Hard money lenders for fix-and-flip projects focus on the future value (ARV) because the property is being improved.
How to Estimate ARV (ARV Calculator Tips)
To determine your potential loan amount, you need a realistic ARV. Here’s a simple way to estimate it:
Find 3–5 recently sold, renovated homes in the same neighborhood that are similar in size, style, and features.
Average their sale prices.
Adjust slightly up or down based on your planned upgrades.
Many investors use free online ARV calculators or work with local real estate agents and appraisers for more accurate numbers. We’re happy to review your ARV comps during the quote process.
Real-World Example
Purchase Price: $280,000
Rehab Budget: $90,000
Projected ARV: $480,000
65% of ARV = $312,000 This means we could potentially fund up to $312,000 toward the total project cost, leaving the investor with a reasonable down payment and closing costs.
Why Investors Choose Property Flip Loan
We keep our fix-and-flip loan structure simple and investor-friendly:
Up to 65% of ARV
Up to 85% Loan-to-Cost on strong deals
Interest-only payments
6–12 month terms
No prepayment penalties
Structured draws based on your renovation progress
If you’re ready to move forward on a fix-and-flip project in Maryland, we make the process straightforward.
Get our free guide: Top 8 Strategies to Close Your Hard Money Loan Fast → https://www.propertyfliploan.com/top8hardmoneytips
Ready to run the numbers on your next deal? Call us at 443-684-7997 or submit your property details online for a fast, no-obligation quote. What’s your next flip? We’d love to help you make it happen.