As-Is Value
What a property is worth in its current condition, before any repairs or renovation. As-is value caps the initial advance on a hard money or fix-and-flip loan, while ARV caps total exposure.
As-is value is what a property is worth in its current condition, today — distressed, dated, or damaged as it may be — before any repairs or renovation. It's the counterpart to after-repair value (ARV), which is what the property will be worth once the planned work is done.
As-is vs. ARV
This pairing is fundamental to rehab lending:
| As-is value | ARV | |
|---|---|---|
| Condition assumed | Current (unrepaired) | After renovation |
| What it represents | What you could sell for now | What you'll sell/refi for later |
| Role in lending | Caps the initial advance | Caps total loan exposure |
A distressed house might have a $160,000 as-is value and a $300,000 ARV after $50,000 of work. Both numbers matter to a lender, and they constrain the loan in different ways.
How lenders use as-is value
On a hard money or fix-and-flip loan, as-is value typically governs the purchase-side advance:
- The lender may lend, say, 70–80% of as-is value for the acquisition portion.
- The rehab portion is funded separately via a draw schedule.
- Total exposure is then capped against ARV (often 65–75%) and loan-to-cost.
So as-is value sets the floor for how much the lender will advance to buy the property, while ARV sets the ceiling on the whole loan. On a straight rental purchase or DSCR refinance with no rehab, as-is value (the current appraised value) is simply the value the loan is sized against.
How as-is value is determined
Like any valuation, it comes from comparable sales — but as-is comps are recent sales of similar-condition properties (other distressed or unrenovated homes), not the renovated comps used for ARV. An appraiser or BPO provider assesses the property's current state and pulls comps that reflect it.
Why it matters to investors
- Acquisition leverage. A higher as-is value can mean a larger purchase advance, reducing your cash to close.
- A reality check on the deal. If your purchase price is well above the as-is value, you're overpaying before you even start the rehab.
- Refinance floor. On a no-rehab refinance, as-is value is the value — there's no ARV uplift to lean on, so seasoning rules about lending on appraised vs. purchase value apply directly.
Understanding both as-is and after-repair value — and which one constrains which part of your loan — is essential to structuring any value-add deal correctly.
Frequently asked questions
What's the difference between as-is value and ARV?
As-is value is what a property is worth in its current, unrepaired condition. ARV (after-repair value) is what it will be worth once the planned renovation is complete. On a rehab loan, as-is value caps the initial purchase advance while ARV caps total loan exposure.
How do lenders use as-is value on a fix-and-flip?
As-is value typically governs the acquisition advance — a lender may fund 70–80% of it to buy the property — while the rehab is funded separately through draws and total exposure is capped against ARV and loan-to-cost. On a no-rehab purchase or refinance, as-is value is simply the value the loan is sized against.
How is as-is value determined?
From comparable sales of similar-condition properties — other distressed or unrenovated homes — rather than the renovated comps used for ARV. An appraiser or broker price opinion assesses the property's current state and pulls comps that match that condition to arrive at the as-is figure.