How to Calculate ARV for Long Island Fix and Flips

After successfully funding a steady stream of fix and flip projects across Long Island over the past five years, I've seen the same scenario play out too many times. An investor contacts my office excited about a property, but when I ask for the ARV backed by solid comps, I get silence on the other end of the phone, or "I think/hope I can sell for X."

Here's the truth: your After Repair Value calculation will make or break your deal. As a private hard money real estate lender operating in Suffolk and Nassau counties, the ARV is the FIRST thing I look at when evaluating a loan application. Get it wrong, and you're not just losing my funding—you're potentially walking into a financial disaster.

What You'll Learn:

• The ARV Framework That Actually Works
• My Three Critical Questions for Every Deal
• Running a CMA for the Long Island Market
• Budgeting Renovations Without Breaking the Bank
• Fatal ARV Mistakes I See Every Week
• Step-by-Step ARV Calculation Example

The ARV Framework That Actually Works

When investors come to me at Equiquest for funding, I need to see more than just your purchase price plus renovation costs. That's not how ARV works. The market doesn't care what you spend—it only cares what buyers will pay for the finished product.

The correct formula isn't: ARV = Purchase Price + Renovation Costs

It's: ARV = What the Market Will Actually Pay for Your Renovated Property

This distinction is CRUCIAL. I've seen investors pour $200,000 into renovations only to discover the market values those improvements at $150,000. In our hyper-competitive Long Island market, where I've been doing business and lending for over 30 years, these miscalculations can wipe out your entire profit margin.

The ARV drives everything in your deal. It determines your maximum purchase price, your loan amount, and ultimately whether you'll make money or lose your shirt. When I underwrite loans, I typically lend up to 65% of the ARV. If you inflate that number, you're not fooling me—you're setting yourself up for failure when the property appraises for less than expected.

My Three Critical Questions for Every Deal

When you call me about a potential deal, I'm going to ask you three questions immediately:

1. What's your purchase price?
This should be based on a contract to purchase or a verbally accepted offer.

2. What's the ARV supported by comps?
Show me at least three comparable sales from the last 90 days. Not active listings—actual closed sales. And they should be from the same school district, because here on Long Island, crossing that invisible line can mean a $100,000 difference in value.

3. What are your construction costs?
I need to see a detailed scope of work or a proposal from a contractor who specializes in fix and flip renovations. Not your cousin who "does construction on the side."

If you can't answer these questions with documentation to back them up, you're not ready for funding. But I can walk you through the process to get the number correct the next time and ensure you win on your next investment. I can make decisions in 24 hours or less, but only when investors come prepared. Ready to apply? Get your documentation together first, then apply online or call.

Running a CMA for the Long Island Market

Long Island isn't one market—it's hundreds of micro-markets. I've lived here for over 30 years, and I can tell you that a house on one side of the street can be worth $50,000 more than an identical house on the other side simply because of school district boundaries.

When selecting comps for your CMA, follow these non-negotiable rules:

Timeframe: Use sales from the last 90 days whenever possible. In this market, anything older than 6 months is ancient history.

Location: Stay within a 1-mile radius, but tighter is better. In dense areas like Garden City or Rockville Centre, I'm looking at a quarter-mile radius.

School Districts: This is the big one. NEVER pull comps from a different school district. Check school boundaries carefully—they're the invisible lines that determine value on Long Island.

Condition: Your comps must reflect your planned renovation level. Comparing your future gut-renovated colonial to a dated sale is how you end up with an ARV that's off by $150,000.

Don't rely on Zillow's Zestimate or automated valuations. They don't understand that proximity to the LIRR can add $75,000 to a home's value, or that being in the Three Village School District versus Comsewogue can mean a price difference even for identical homes.

You can rely on a great realtor to provide accurate CMAs.

Budgeting Renovations Without Breaking the Bank

Here's what renovation really costs on Long Island in 2025, based on the projects I've funded:

Full gut renovation: Range from $100,000-$200,000 plus.

The biggest mistake I see? Investors coming to me with a $30,000 kitchen budget when the neighborhood standard requires a $60,000 kitchen. You can't put Home Depot cabinets in a neighborhood where everyone has custom cabinetry and expect to hit your ARV.

But here's the flip side—don't over-improve. A renovation in Levittown where you installed a $100,000 kitchen. That's a problem. The neighborhood comps topped out at homes with $40,000 kitchens. That extra $60,000 was money thrown away.

Always budget a 15-20% contingency. With Long Island's older housing stock, you WILL find surprises behind those walls. Termites, outdated electrical, asbestos—I've seen it all. Need funding that accounts for these realities? Let's talk.

Fatal ARV Mistakes I See Every Week

After reviewing deals, these are the mistakes that kill profitability:

Using asking prices instead of sold prices. An active listing at $900,000 means nothing if similar homes are selling for $750,000. I only care about closed sales.

Ignoring micro-market boundaries. One investor showed me comps from Syosset to justify a Hicksville deal. Different school districts, different train stop, different universe of values.

Forgetting soft costs (carrying costs). Your ARV calculation is super important but you also need to account for more than lumber and labor. Property taxes on Long Island can run $1,000+ per month. Add insurance, utilities, and financing costs, and you're looking at $5,000-$10,000 monthly in holding costs. A 6-month project means $30,000-$60,000 in carrying costs alone.

Static market thinking. Calculating your ARV based on today's market when your project won't be done for 6-9 months is dangerous. Right now in August 2025, I'm seeing very strong demand on Long Island. If you're not factoring in potential market shifts, you're gambling, not investing.

Step-by-Step ARV Calculation Example

Let me walk you through how I evaluate a typical deal that crosses my desk:

The Property: 3-bed, 1-bath Cape in Levittown, needs everything
Asking Price: $495,000
Plan: Full gut plus dormer addition to create 4-bed, 2.5-bath

Step 1: Pull the Comps

I find three fully renovated 4-bedroom homes in the Levittown school district that sold in the last 90 days:

• Comp 1: $810,000 (slightly smaller, adjust up $10,000)
• Comp 2: $865,000 (larger by 400 sq ft, adjust down $40,000)
• Comp 3: $890,000 (extra bathroom, adjust down $15,000)

Adjusted comp average: $835,000 (This is your ARV)

Step 2: Calculate Renovation Costs

• Dormer addition: $175,000
• Full gut renovation: $200,000
• Contingency (15%): $56,000
• Total renovation: $431,000

Step 3: Apply the 70% Rule

Maximum Purchase Price = (ARV × 0.70) - Renovation Costs
Maximum Purchase Price = ($835,000 × 0.70) - $431,000
Maximum Purchase Price = $584,500 - $431,000 = $153,500

The asking price is $495,000. The maximum you should pay is $153,500. This deal doesn't work unless you can negotiate a reduction.

This is exactly why accurate ARV calculation is critical. Without it, you might think you've found a great deal when you're actually looking at a guaranteed loss.

The Bottom Line from a Lender's Perspective

I'm not in the business of saying no—I want to fund your deals. But I've been in this market too long to fund deals that don't make sense. When you come to me with inflated ARVs or back-of-napkin calculations, you're not ready.

Success in Long Island's fix and flip market isn't about finding properties—they're out there. It's about analyzing them correctly. Master your ARV calculations, understand our micro-markets, and come prepared with real data.

The investors who succeed are the ones who treat this like a business, not a hobby. They have their team in place—contractor, attorney, title company—before they start looking for deals. They know their numbers cold. And when they find the right opportunity, they can move at lightning speed because they've done their homework.

That's when I can help. When you've found a deal that actually works, with an ARV that's defensible and renovation costs that are realistic, I can get you funded in days, not weeks. No red tape, no third-party apps—just local knowledge and fast capital from someone who's been in these neighborhoods for decades.

Remember, in this market, precision beats speculation every time. Get your ARV right, and everything else falls into place. Get it wrong, and no amount of hard work can save a bad deal.

Ready to fund your next flip? Come prepared with your ARV analysis, and let's get your deal done.