Hard money lenders determine the After-Repair Value (ARV) by analyzing comparable sales (comps) of similar properties and assessing local market trends. They review the borrower’s construction scope, including renovation plans and budget. They may also use a broker price opinion (BPO) or a professional appraisal or Realtor to estimate the property’s potential value after improvements. Additionally, a borrower’s experience with past real estate projects can influence the lender’s assessment. Typically, lenders offer loan amounts between 55% and 65% of the ARV to maintain a safety margin against market fluctuations.