I looked into a property being sold by fannie mae (through homeopath.com), the property is in pretty good condition all i would need to do really is remove the carpet and tile and install new tile throughout the house.  

With regards to ARV for a refi, like @Scott Schultz noted, appraisers (and home inspectors for that matter) typically just observe what they see and appraise the home based on its present condition. 

A couple of years ago we were able to snatch up foreclosures in mint condition, but now it's a bit more difficult.

I may get some flack for this, but the fact is that advertising is in a huge shift right now and mobile devices are the new thing.

Living room has an offwhite berber carpet that is in like new condition and looks very nice with the exception of 2 places where there are stains.

I'm a full-time Realtor here on Maui, from Seattle, and I tell all my clients that my goal is to educate them on our values and provide as much information as I can about the property, neighborhood, historical sales data, current market conditions, etc.  

Using comparable sold properties with similar condition to your end product, within a 1/2 mile (sometimes a little further), less than 6 months old, within 20% of square footage, not crossing major boundaries ( high ways, school districts, city lines, etc).

FHA is just a guarantee that, provided certain conditions are met, can be placed on the loan to increase a bank's willingness to lend.  

Generally, in my experience, hard money lenders only loan 75-80% of the LTV in as-is condition.

They all had 3 br 2 bath condition is very good.