how to figure repair costs and arv

Question

im new to BP and BP Pro but excited to start my REI career. I seen somewhere where there is a list of how to figure rehab costs but i cant find it. can someone help me please? also how do i know what the arv is? do i just figure out high comparables? Thanks so much, Denny

David Martoyan · Answer

Hi Denny,

Welcome to BiggerPockets and congrats on starting your real estate investing journey! Rehab costs and ARV (After Repair Value) are key parts of evaluating deals, so it’s great that you’re diving into these concepts early.

For rehab costs, creating a rough estimate starts with understanding the scope of work and local pricing for materials and labor.

• Light Cosmetic: $25-$40 per sq. ft. (e.g., paint, flooring)
• Medium Cosmetic: $40-$60 per sq. ft. (e.g., kitchen and bath updates)
• Heavy Rehab: $60-$85 per sq. ft. (e.g., major systems like plumbing/electrical)
• Full Gut/Studs Down: $85-$120 per sq. ft.
• Luxury Finishes: $150+ per sq. ft.

For ARV (After Repair Value), you’re absolutely right—it’s all about comparable sales ("comps"). Look at recently sold properties in the same neighborhood that match the size, condition, and style your property will have post-rehab. Platforms like Zillow, Realtor.com, or even tools provided by BiggerPockets can help. However, having an experienced real estate agent or investor in your network analyze comps adds an extra layer of confidence.

If you’re focusing on specific markets and ever want to discuss analyzing deals or strategies, feel free to connect, Our firm would love to help you! Wishing you the best in your investing journey.

Best Regards,

David.

Jake Baker · Answer

@Dennis Knapp

J Scotts book on estimating rehab costs is a great start. https://store.biggerpockets.com/products/the-book-on-estimat...

Here is a "general" rule of thumb for my market in Jacksonville, FL.
Light Cosmetic ($40 x Sq. Ft)
Medium Cosmetic ($50 Sq. Ft)
Heavy Cosmetic ($60 x Sq. Ft)
Studs Down ($85 x Sq. Ft)
Luxury ($175 x Sq. Ft)

For ARV, it is best to have an experienced real estate agent find comps for you to determine a safe number to work off of.

You are on the right track. ARV and Rehab costs are where BRRRR investors tend to make mistakes the most.

River Sava · Answer

Hey Denny -

For rehab costs, a good place to start is breaking things down room by room and getting rough estimates for common repairs like the roof, HVAC, kitchen, light cosmetics, etc. Connecting with local contractors or experienced investors in your area is also very helpful for getting accurate numbers.

For ARV you’ll want to look at comps; You can start on Zillow or Realtor.com but I highly suggest connecting with a local agent. Where are you looking to invest?

Caleb Brown · Answer

You can use a SQ FT format to guess rehab but that is only good to initially look at a deal. I would highly encourage paying a GC to walk deals out the gate, have them give a scope of work so you can see what items costs. As far as ARV I would find an agent who works with investors to work with you. There are programs to find solds so that would be a good idea but an agent can pull directly from the MLS. They can send you comps so you can confirm the estimated ARV.

Greg Kasmer · Answer

@Dennis Knapp - Bigger Pockets has a book called "Estimating Rehab Costs" that was published in 2019 prior to pandemic. The numbers may be 30-40% lower than today's cost, but the process/approach to estimating may be good for you to review. Thanks!

how to figure repair costs and arv

how to figure repair costs and arv

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