Now that you know what ARV is let’s discuss how the idea is implemented in real estate. House flippers and cash buyers most commonly use ARV. House flipping is a short-term strategy where an investor buys the property that requires modification. The investor would then make the repairs to sell the property at a profit. To ensure the profit is large enough to put in money, the investor looks at the estimated ARV and the consequent renovation and repair costs.
See Also: Should You Renovate Your Property Before Selling or Sell it As-is?