Name the finish level your ARV assumes

You pull three sold comps, average them, and write the after repair value at the top of the deal sheet. Every one of those houses sold finished to some level of quality, and that level, not the square footage, is what your rehab budget now has to buy.

Most deal sheets set the two numbers separately. The ARV comes from a comp search in the morning and the rehab figure comes from a walkthrough in the afternoon, and nothing on the page checks that they describe the same house.

A comp set is a specification, not just a price

The public guides are blunt about this. Rehab Valuator tells investors that the condition of the comps should be similar to what the property will look like when the rehab is done, and that if you are buying to renovate, your comps should be already renovated properties with similar finishes to what you plan to put in ¹.

FlipperForce describes the same rule from the appraiser's side. An appraiser pulls three to five sales from the last one to six months, in close proximity, with similar square footage, bed and bath count, and a similar level of finishes and amenities, then adjusts each one up or down until the properties are comparable ².

Read that as an instruction rather than as background. When you accept a set of comps, you have accepted a description of the house you are going to deliver. The resale number is only available to you if you build to that description.

Condition is the largest adjustment and the one most often missing

In the adjustment grid FlipperForce works through, three comps are compared to a 1,700 square foot subject. One comp gives up 5,000 for an extra bedroom and 1,000 for an extra half bath. Size differences of 25 square feet move the value by 3,000. The comp that sold with some updates rather than a full rehab takes a positive adjustment of 10,000, the largest single line in the grid ².

That is the line investors most often skip, because it is the hardest to source. Beds, baths and square footage sit in the sale record. Condition has to be read out of photographs and listing remarks, and for a large share of sold houses there is not enough of either to call.

Our own data says how large. Of 821 comparable sales weighted into customer after repair values on iComps over the last seven days, 35.6 percent carried a condition read that our pricing uses ³⁴. A further 56.9 percent sat in a no opinion band and took no condition adjustment at all, and 7.6 percent carried no score whatsoever ⁵⁶. Across the wider pool of 862,180 sales from the last 180 days, 50.5 percent carry any condition score ⁷⁸.

So on a typical analysis, the majority of the sales behind the number say nothing about how finished they were. Treating a sale with no condition evidence as equivalent to a renovated sale is not neutral. It quietly prices your house as renovated, and then leaves the cost of getting there off the sheet.

The margin no longer absorbs it

There used to be room for this kind of error. There is less of it now. The typical gross flipping margin was 21.5 percent in the second quarter of 2026, against 27.6 percent at the same point a year earlier ⁹.

A finish level mismatch is not a rounding error against six points of lost cushion. It shows up twice, once as a resale you cannot reach and once as a scope you did not price, and the two move in the same direction.

A worked example

Figures here are an illustration, not a measurement. Subject house, 1,700 square feet, three sales in the last four months.

• Comp A, renovated, sold 200,000
• Comp B, renovated, sold 210,000
• Comp C, some updates, sold 190,000

Average the three as they sold and you get 200,000. Adjust comp C upward by 10,000 to put it at the finish level of the other two, the way the appraisal grid does ², and the set reads 200,000, 210,000 and 200,000, for an average of 203,333.

The 3,333 difference in the ARV is the small half of the problem. The large half is the sentence hiding under it. Both versions of that number describe a renovated house. If your rehab budget covers paint, floors and a cleanup, you have taken a renovated resale and funded a cosmetic refresh. The gap between those two finish levels is the kitchen, the baths, and whatever the mechanical systems need, and it is not a contingency item. It is a scope item you never wrote down.

The reverse error is cheaper but still real. Underwrite from comps that sold dated, build to a full renovation, and you have spent for a resale your comp set never supported.

Name the level first, in words

Four steps, in this order, before the offer.

1. Write the finish level on the sheet before you pull a single comp. Cosmetic refresh, mid level renovation with a new kitchen and baths, or full renovation including systems. Three words beat a dollar figure here.
2. Tag every comp with the level it sold at, from the photographs rather than the remarks. If the photos do not show a kitchen, the comp has no condition evidence. Mark it unknown. Do not promote it to renovated because the price was high.
3. Drop or adjust. Keep the comps that sold at your target level, or carry an explicit condition adjustment on the ones that did not, and write the adjustment down where a lender or partner can see it.
4. Carry the same words into the rehab scope, room by room. This is where a single cost per square foot figure fails you, because it does not name a finish level, so it can never be checked against the comps that set your resale.

One more check at the end. If more than half of your comps are tagged unknown, you do not have an after repair value yet, you have a range, and the offer should be priced off the bottom of it.

Doing this on iComps

iComps scores the condition of the sold comps it weights into an after repair value, from the sale record and the listing photos, and the weighting uses that read rather than price alone. Where the evidence is not there, we say no opinion instead of assuming renovated, which is why most of the comps weighted last week sit in that band ⁵.

Start an analysis at icomps.io/calculate, open the comp list, and read the condition column before you read the value. The question to answer is simple: were these houses finished to the level I am about to pay to reach.

What to do next

Before your next offer, write the finish level above the ARV on the deal sheet, in words. Then check two things against it: that every comp under that number sold at that level, and that the rehab budget buys it. If either check fails, the ARV is not yet a number you can underwrite.

Photo by MrWashingt0n on Pixabay.

Footnotes

1. https://rehabvaluator.com/how-to-calculate-arv-and-find-comps (read 17 October 2026) ↩

2. https://flipperforce.com/how-to-flip-houses/chapter-4-how-to-analyze-house-flip-deals/comparables (read 17 October 2026) ↩ ↩² ↩³

3. renovation.coverage.customerComps.count, 821, observed 17 October 2026 ↩

4. renovation.coverage.customerComps.realScoreShare, 0.3557, observed 17 October 2026 ↩

5. renovation.coverage.customerComps.noOpinionShare, 0.5688, observed 17 October 2026 ↩ ↩²

6. renovation.coverage.customerComps.unscoredShare, 0.0755, observed 17 October 2026 ↩

7. renovation.coverage.compPool.sold, 862180, observed 17 October 2026 ↩

8. renovation.coverage.compPool.scoredShare, 0.5047, observed 17 October 2026 ↩

9. ATTOM Q2 2026 home flipping report, released 1 October 2026, https://www.attomdata.com/news/market-trends/flipping/home-flipping-profits-continue-gradual-two-year-decline/ ↩