What is As-Is Value in hard money lending?

As-Is Value (AIV) is the appraised market value of a property in its current condition before renovation. For fix and flip loans, it represents what the distressed property is worth today — before any planned improvements. Hard money lenders use AIV to verify the purchase price, assess the as-is LTV, and understand their security position if the renovation is never completed.

What is the difference between AIV and ARV?

AIV (As-Is Value) is the property's current market value in its unrenovated condition. ARV (After-Repair Value) is the projected market value after all planned renovations are complete. Hard money fix and flip appraisals produce both values. AIV is used for baseline verification and security assessment; ARV is used to size the maximum loan amount (typically capped at 70-75% of ARV).

What happens if the purchase price is higher than the As-Is Value?

If the purchase price exceeds the appraised As-Is Value, the lender sizes the loan based on the lower of the two — not the purchase price. The borrower must cover the gap out of pocket in addition to the standard down payment. Significantly overpaying relative to AIV may also signal that the deal economics are weaker than projected and prompt the lender to scrutinize the ARV more carefully.

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As-Is Value (AIV): What It Means in Hard Money Lending

By Broker Cheetah Editorial Team · April 2026

Direct Answer

As-Is Value (AIV) is the appraised market value of a property in its current condition — before any planned renovations are made. Hard money lenders use AIV to establish the baseline value of a property at acquisition. For fix and flip underwriting, AIV represents what the property is worth today (distressed), while ARV represents what it will be worth after renovation. Both numbers appear in a standard fix and flip appraisal.

What As-Is Value Measures

As-Is Value answers one question: what would this property sell for on the open market right now, in its current condition?

For a fix and flip purchase, "current condition" typically means a distressed property — deferred maintenance, outdated finishes, possibly cosmetic or structural damage. The AIV reflects what a buyer would pay for that property today, knowing it needs work.

A house in pristine, move-in condition in a neighborhood might have a market value of $350,000. That same house, with a failing roof, damaged subfloor, and a 1970s kitchen, might have an AIV of $180,000 — the price an investor or distressed-sale buyer would pay given the work required.

How AIV Is Determined

A licensed appraiser establishes AIV by:

Inspecting the property in its current condition
Identifying comparable sales of similar properties in comparable condition — other distressed or below-market sales in the area
Adjusting for differences in size, condition, location, and features
Arriving at a supported opinion of current market value

AIV comps are not the same as ARV comps. ARV uses fully renovated comparable sales. AIV uses sales of properties in similar current (unrenovated) condition.

Where AIV Shows Up in Hard Money Underwriting

Hard money fix and flip appraisals typically produce two values:

As-Is Value (AIV): What the property is worth today
As-Repaired Value (ARV): What the property will be worth after the planned renovation

Lenders use both in their underwriting:

AIV is used to:

Verify the purchase price makes sense relative to current value (a lender does not want a borrower significantly overpaying for a distressed asset)
Calculate the as-is LTV — how much equity the borrower has at the moment of purchase
Assess the lender's security position if the renovation is abandoned (what can they recover if they had to sell today?)

ARV is used to:

Size the total loan amount (capped at 70-75% of ARV)
Evaluate whether the renovation plan makes economic sense relative to the projected exit value

AIV vs. Purchase Price

On a well-structured fix and flip purchase, the purchase price should be at or below the AIV — meaning the investor is buying at or below current market value. This creates built-in equity from day one.

If the purchase price significantly exceeds the AIV, the appraisal is signaling that the borrower may be overpaying for the property. The lender's loan is based on the lower of purchase price or AIV, so an inflated purchase price does not increase the loan amount.

AIV vs. Market Value vs. ARV

These three terms are related but distinct:

Market Value: A general term for what a property would sell for under normal market conditions. Can apply to properties in any condition.

As-Is Value (AIV): A specific application of market value — the current market value of a property in its present, unrenovated condition. Used specifically in renovation lending contexts.

After-Repair Value (ARV): The projected market value of the property after all planned renovations are complete. The ceiling for loan sizing on fix and flip deals.

For a distressed property that will be renovated, these three values represent the timeline of value: AIV (value now) → improvements → ARV (value at completion).

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