Case Study: The ARV Was Right in Friendswood. The Price Was $27,500 Too High.

By Steve Waller · November 7, 2026

The deal

A wholesaler sent over an off-market house in Friendswood: a 1970 brick single-story, three bedrooms and two baths, about 1,550 square feet on a big lot, held by one owner since 1999. The asking price was $180,000 and the after-repair value on the sheet was $290,000. There were no interior photos.

The value checks out

This one's worth saying up front: the wholesaler's ARV holds. We pulled 38 closed sales of similar-size houses in the same subdivision over three years. The median, at about $177 a square foot, is a median-condition house worth around $274,000. The renovated sales set the top, and they cluster right at $290,000: a same-size 1970 house with new floors, paint and tops in March, a quartz-kitchen remodel in July, another in September. Two flips in the set bought around $210,000 to $215,000 and sold for $293,000 and $300,000.

The repairs

A 1970 house held by one owner for 27 years gets priced as dated throughout until photos say otherwise. The finish level that earns $290,000 here is new flooring, paint and an updated kitchen with quartz. That puts the realistic budget at about $55,000, with a range of $33,000 if the systems pass to $100,000 if the roof, HVAC and finishes all get replaced. The first thing to buy is a sewer camera on the cast iron under the slab.

The numbers, the ACP way

ARV times the advance rate, less repairs, less closing costs, less the purchase price, equals the cash due at closing. At $290,000, $55,000 of work, about $10,000 of closing and the $180,000 price:

• At 75%: the loan is $217,500 and the investor brings $27,500 to closing.
• At 70%: the loan is $203,000 and the cash due is $42,000.

Turned around, the deal supports about $152,500 at 75% and $138,000 at 70%. At $180,000 it only clears at 75% if the work comes in at $27,500 or less, which is the cosmetic end of a blind estimate on a 55-year-old house.

Flip vs rent

As a flip at $180,000: all-in is about $245,000. Sell at $290,000, pay about $20,000 to sell, and roughly $25,000 is left before interest and holding costs. A soft appraisal or a sewer line eats most of it.

As a flip at $138,000: all-in is about $203,000, and the same sale leaves roughly $67,000 before carry.

As a rental: a DSCR loan at 75% of $290,000 is $217,500. That pays off the bridge loan and nothing more, so the $27,500 to $42,000 the investor brought to closing stays in the house for as long as they own it.

What should have happened first

A correct ARV doesn't make the price correct. The investor should have run the numbers before getting into the hard money loan, not after, and the Deal Estimator at acp-lending.com would have shown it in a few minutes: $27,500 to $42,000 due at closing at $180,000, and nothing due at $138,000. The Free Deal Check would have flagged the missing photos and the age of the systems as the two things that move the budget.

What to do on yours

Check the wholesaler's ARV, and when it holds up, check the price anyway. Get interior photos or a walk-through before you count on a repair number, and counter at the price where 70% to 75% of ARV covers price, repairs and closing. Run your deal through the Deal Estimator, the DSCR Calculator or the Free Deal Check at acp-lending.com, or send it to me and I'll structure it with you before you sign anything.

The full report, and every earlier one, is available on ACP's website at acp-lending.com. Investors can sign up at acp-lending.com/investor-brief to receive new reports by email.

Market data is from public sources and is provided for information only. Nothing here is an offer of credit, a rate quote, or investment advice. Financing is subject to underwriting, lender approval, appraisal or valuation, title, insurance, property eligibility and program availability.

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