Catherine BellEmpowering Women to Create Financial Freedom Through Passive Income, Real Estate, and Social Impact

Unlock Land Deals: The 10-15% ARV Rule Explained! #shorts

29 Apr 2026 · 1 min

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1:01

In this Deal Room short, the presenter explains the core guideline for purchasing vacant land: the offer price should be between 10 % and 15 % of the property's projected after‑repair value (ARV). The rule applies whether the land will host a single‑family home or a commercial building. For a $500 k house, the lot price should be $50‑75 k; for a $1 M commercial project, the lot should be no more than $100 k. The upper 15 % threshold is justified when the lot already has utilities (electric, water, drainage or sewer) because those utilities add value. If the land requires demolition of an existing structure, the offer reverts to the lower 10 % range. The speaker frames this as the “fair asking offer” (FAO) or “fair counter‑offer” and emphasizes it as the number‑one rule for land deals.

Chapters

Today in the Deal Room. Are you within 10 or 15% of ARV? That's number one rule. Like vacant land. If there's a building on it and you have to knock it down and build, build up to build on it again, it makes the, the fair asking price or fair asking offer, FAO, or fair counteroffer, whatever, is to offer between 10 and 15% of the ARV of what you're building. So if you're building single family and the house is $500,000, you want to pay no more than 50. $50,000 to $75,000 for the lot, right? If the lot is for commercial and you can do a million-dollar building, you're not going to want to pay more than $100,000 for the lot, right? Call it a 10 to 15% range, because if it's got electric, water, and, and, and drainage or sewer, then we've got, we've got utilities on the property, and utilities on the property are valuable. So I'll give them 15%, I'll go to 15%. But beyond that, if I got to go knock a building down, it goes back down to 10.