Fix and Flip Strategies: Why ARV Accuracy Leads the Way
Start With the Number That Drives Everything
ARV is the projected value of a property after renovations are complete. It’s not today’s value. It’s not a hopeful target. It’s what the market is likely to pay once the work is done.
That one estimate influences:
The rehab scope
Financing conversations
The eventual list price
And ultimately, the profit
I’ve seen strong properties turn into weak deals because ARV was built on inaccurate comps. In some areas, proximity shouldn’t be the main comparable factor. This is especially true in southeast Wisconsin.
Two homes in Milwaukee can be separated by just a few blocks and sit in entirely different buyer pools. Factors such as school zones and traffic patterns need to be considered. If your comps don’t reflect that, your margin could shrink before you ever swing a hammer.
The test I encourage investors to use:
If the appraisal comes in slightly lower than expected, does the deal still make sense?
If the answer is no, the ARV likely needs another look.
ARV and Rehab Strategy Go Together
Accurate ARV only works if the renovation plan supports it.
If you’re targeting a $425,000 resale in Waukesha, your finish level needs to match what buyers expect at $425,000 — not what worked on a $600,000 Brookfield flip.
Over-improving will erase profit, but under-improving can stall your sale.
The discipline comes in matching scope to neighborhood expectations:
Are buyers expecting quartz and custom cabinetry, or will clean, functional updates suffice?
Does the floor plan need to be opened up, or will cosmetic improvements deliver a strong enough return?
This is where rehab budget tools can mislead. A per-square-foot estimate may get you in the ballpark, but it won’t account for:
The age of the home
Mechanical surprises
Permit timing
Seasonal delays
Or how aggressively you plan to finish the property
Line-item scopes protect investors. Contingencies protect profits. Especially in older Wisconsin housing stock, where surprises are part of the equation.
Purchase Discipline: Protecting the Front End
Many investors use the 70% rule as a framework:
(ARV × 70%) – Estimated Repairs = Maximum Offer
But this is not a magic formula.
The purpose isn’t to hit exactly 70%. The purpose is to create space for additional expenses, such as holding costs, closing costs, realtor commissions, and timeline drift. If ARV is slightly optimistic and repairs are slightly underestimated, that cushion disappears quickly.
The investors who perform consistently well aren’t necessarily buying the cheapest properties. They’re buying with margin protection built in from day one.
Flexible Financing Supports Strong Execution
Delays in execution are one of the top killers of fix-and-flip real estate deals.
In southeast Wisconsin, speed still wins, especially right now when inventory is tight.
Flexible financing plays a role here:
✅ Fast closings help secure the property.
✅ Clear underwriting expectations reduce last-minute stress.
✅ Predictable draw schedules keep crews working.
A fractional rate difference rarely determines success. But timeline definitely can.
When financing aligns with a well-supported ARV and a realistic rehab plan, the project tends to move smoothly from acquisition to resale.
Strong Strategy Is Built on Discipline
The flips that perform well share common characteristics:
Conservative ARV assumptions
Realistic renovation budgets
Scope that fits the neighborhood
Purchase discipline
Tight timelines
Clean pricing strategy at resale
They are strategically structured.
If you’re analyzing a deal and want to pressure-test your ARV or rehab scope before committing, I’m always happy to look at it with you. A ten-minute review on the front end can prevent months of stress (and lost profits) on the back end.
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Legal Disclaimer:
This article is provided for informational and educational purposes only and is not intended to constitute legal advice. Real estate regulations can be complex and situation-specific. Readers should consult with qualified legal counsel or a licensed attorney for guidance regarding their particular transaction or compliance obligations.
At MGM Private Capital, we actively support real estate investors across Southeastern Wisconsin with trusted capital options and offer opportunities for capital partners to grow alongside us.
When investors talk about “fix and flip strategies,” the conversation usually starts with tactics: where to find deals, how to negotiate harder, how to stretch margins.
But the strongest flips don’t begin with tactics.
They begin with one number: ARV — After Repair Value.
That number determines almost every decision that follows. If it’s solid, the rest of the plan has structure. If it’s inflated, the whole deal could crumble.
We walk you through the importance of a solid ARV and how to start your deal off on the strongest footing possible.