After Repair Value (ARV): The Foundation of Every Deal
ARV is the single most important number in a fix-and-flip deal. Master the art and science of estimating it accurately.
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Property Valuation6 min read
Comparative Market Analysis (CMA) for Investors
A CMA is more than a real estate agent's tool — it's an investor's secret weapon for accurate valuations.
A Comparative Market Analysis compares a subject property to similar recently sold properties to estimate its market value. While agents use CMAs to set listing prices, investors use them to determine both the current as-is value and the After Repair Value.
The quality of a CMA depends entirely on the quality of the comparables selected. The ideal comp is within 0.5 miles of the subject, sold within the last 90 days, within 200 square feet and 10 years of age of the subject, in the same school district and neighborhood, and of similar construction type and style.
When perfect comps don't exist (they rarely do), adjustments are necessary. Standard adjustments include $20–$50 per square foot for size differences, $5,000–$15,000 per bedroom, $5,000–$10,000 per bathroom, $10,000–$25,000 for a garage, and $5,000–$20,000 for lot size premiums. These figures vary dramatically by market, so calibrate your adjustments to local norms.
Beyond sold comps, analyze active listings and pending sales. Active listings set the ceiling — buyers have alternatives at those prices. Pending sales indicate current market demand and often reflect where the market is heading. Days on market for sold comps reveal market velocity and pricing efficiency.
A thorough CMA for an investment property should include at least 6 comps, adjusted values, a reconciled opinion of value, and a confidence rating. Document your analysis — it builds credibility with lenders and partners, and creates a reference for future deals in the same area.
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