Every figure in an Arvo report comes from a deterministic underwriting engine — the same formulas lenders and seasoned investors use — fed by live market data and conservative assumptions. Here's exactly how it works, and where the limits are.
Comparable sales, valuations, rent benchmarks, tax records, and walk scores are pulled live from MLS-backed sources (Zillow, Redfin) plus HUD Fair Market Rent data at the moment you run the analysis.
Comps are screened by distance, recency, size, and property type, then run through IQR (interquartile range) outlier filtering — so one luxury flip or distressed sale down the street doesn't distort your after-repair value. Every comp used is listed in the report; nothing hides behind the number.
ARV = median $/sqft of filtered comps × subject sqftCap rate, cash-on-cash, DSCR, IRR, GRM, break-even occupancy, and max-offer ceilings are computed by a pure math engine using standard real-estate methodology. Run the same inputs twice, get the same answer twice. AI assists with data extraction and repair scoping — it never invents a financial metric.
Cap Rate = NOI ÷ Price · DSCR = NOI ÷ Annual Debt Service8% vacancy, 10% management, maintenance and CapEx reserves baked in from day one. Arvo's defaults are built to keep you out of bad deals, not to make marginal ones look good — and every assumption is visible and editable.
Each analysis includes sensitivity tables (rent, vacancy, interest rate, purchase price) and downside stress scenarios — high vacancy, rate hikes, rent drops, and combined stress — so you know how much cushion a deal really has before you offer.
The subject is a 1,500 sqft single-family home. The only recent sales within range are 880–1,100 sqft units — and smaller homes almost always trade at a higher price per square foot. Take the raw median and the after-repair value balloons.
| Recent comparable sale | Size | Sale $/sqft |
|---|---|---|
| Comp A | 880 sqft | $301 |
| Comp B | 920 sqft | $284 |
| Comp C | 960 sqft | $273 |
| Comp D | 1,040 sqft | $268 |
| Comp E | 1,100 sqft | $255 |
RentCast's automated valuation is computed for the exact address at its actual square footage, so it isn't fooled by smaller comps. Arvo caps the comp-derived ARV at 1.2× the AVM-anchored renovated value — anything higher is treated as size- or class-mismatched and pulled back down.
That's an $88,500 haircut off an inflated number — the difference between a deal that looks good on a spreadsheet and one that actually pencils. Every comp, the filter, and the anchor are shown in your report, so you can see exactly why the number landed where it did.
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