The Investor’s Edge: Mastering ARV to Nail the Right Purchase Price

By Quentin Trisler

When it comes to real estate investing, Quentin Trisler believes one fundamental skill separates the seasoned investor from the amateur: the ability to analyze a deal using After-Repair Value (ARV) and work the numbers backwards. It’s a mistake Quentin sees too often—new investors jump into deals based on emotion rather than sound math, leading to costly missteps.

So, what’s the right way to approach a deal? Quentin Trisler breaks it down step by step.

Step 1: Determine the ARV

The ARV (After-Repair Value) is the estimated market value of the property after all necessary renovations have been completed. Quentin advises new investors to study comparable sales (comps) in the area—look at recently sold homes with similar specs, square footage, and location. This gives you a realistic target price for what your property could sell for post-renovation.

Step 2: Calculate Rehab and Holding Costs

Once you know the ARV, Quentin Trisler emphasizes the importance of getting accurate rehab estimates. Too often, investors underestimate renovation costs, leading to slimmer (or nonexistent) profit margins. Quentin suggests working with experienced contractors to get detailed quotes.

Beyond rehab, don’t forget holding costs—loan payments, utilities, property taxes, and insurance—all of which can eat into your profits the longer you hold the property.

Step 3: Work Backwards to Find the Right Purchase Price

Now comes the magic formula Quentin Trisler swears by:

Maximum Purchase Price = ARV – Rehab Costs – Holding Costs – Your Profit Margin

For example, if the ARV is $300,000, rehab costs are $50,000, holding costs total $10,000, and you want to make at least $40,000 in profit, your maximum purchase price should be:

$300,000 – $50,000 – $10,000 – $40,000 = $200,000

Quentin warns that if you pay even $210,000 instead of $200,000, your profit drops to $30,000—and that’s assuming no unexpected surprises arise. Stick to the math, not emotions.

Final Thoughts from Quentin Trisler

Quentin Trisler believes that real estate success isn’t about luck—it’s about discipline and numbers. By properly analyzing ARV, rehab costs, and working backwards to determine your max purchase price, you set yourself up for profitable investments rather than financial headaches.

For those serious about investing, Quentin urges: “If the numbers don’t work, walk away. There will always be another deal.”