How to Analyze a Fix & Flip Deal in 10 Minutes

Most investors do one of two things when a deal lands in their inbox. They either overthink it, building a spreadsheet for three hours and missing the window, or they get excited and skip the math entirely. Here is the order of operations I actually walk an investor through, and how to know in a few minutes whether a deal is worth a closer look.

Start With the Term Sheet, Not a Spreadsheet

Here is the first move most people get backwards. Before you build anything, get a term sheet. When you submit an application on my site, you get an instant term sheet back, and that one document tells you most of what you need to know up front.

It shows you where the lender's loan-to-value sits on this specific deal, your estimated cash to close, and the proof of funds you would need to get approved. The application pulls at roughly five percent down on the purchase price, which is doable in the larger metro areas of the states I broker in.

What you are really looking for is one thing: how much equity is in the deal. If the lender goes up to 75 percent of the after repair value and your deal is already sitting at 75 percent, you are maxed out. Every dollar past that comes out of your pocket, so your down payment and closing costs climb. But if the deal pencils at 70 percent with room up to 75, you have a cushion. That cushion is what saves you when the appraisal comes in light or the rehab runs ten or twenty percent over.

Step 1: Nail the ARV

After repair value (what the home is worth once it is fully renovated) is the number everything else hangs on. Pull comparable sales (recently sold homes similar to yours, called comps) from the last 90 days, in the same neighborhood, with similar square footage, bed and bath count, and finish level. Use at least three.

Get this number wrong and every other number is wrong with it. For more on this, here is a deeper breakdown of how ARV actually works.

Step 2: Estimate the Rehab, Then Pad It

If you cannot walk the property yet, use these 2026 ranges as a quick screen:

• Light cosmetic (paint, flooring, fixtures, cleanup): $25 to $40 per sq ft
• Moderate value-add (kitchen, baths, plus cosmetic): $50 to $75 per sq ft
• Full gut renovation (down to the studs): $90 to $135+ per sq ft

One thing to know if you are flipping in Texas: hot Sun Belt markets like Houston tend to run on the higher end of these ranges, because labor demand is high. Lean conservative. And whatever number you land on, I build a 10 percent contingency into every budget I touch. Rehab costs run over far more often than they come in under, and that ten percent is the difference between a stressful project and a smooth one.

Step 3: Run the 70% Rule

Example: an ARV of $350K with a $60K rehab. Max offer = ($350,000 x 0.70) - $60,000 = $185,000.

This is your ceiling, not your opening offer. The 70 percent baked in is your rough room for holding costs, selling costs, and profit. I think the 70 percent rule holds up well as a fast filter across the board. Just remember what it is: a screen to kill bad deals quickly, not a precise profit number.

Step 4: Run the Real Numbers (This Is Where People Slip)

If the deal clears the 70 percent screen, run the full picture:

• Purchase price
• Rehab costs (with your contingency)
• Financing costs (points plus interest over your hold, usually 6 to 9 months)
• Holding costs (taxes, insurance, utilities, every month you own it)
• Selling costs (agent commissions and closing costs, roughly 7 to 9% of the sale price)

The Two Things New Investors Forget

Holding costs. This is the single most common analysis mistake I see. Investors lock in on purchase and rehab and gloss over the monthly carry. Every month that property sits, you are paying taxes, insurance, utilities, and loan interest. You need to know that number cold and know you can sustain it, because a project that runs long quietly eats your profit.

Fronting the rehab. The lender reimburses 100 percent of your rehab budget, but the key word is reimburse. You finish a stage of work, the lender inspects it, then releases that draw (the rehab money paid out in stages as you finish). That means you or your contractor front the first chunk to get started. I work with contractors who are fine with that, because they know the money is safe once the budget is closed in escrow and on title. Just do not go into a deal scraping to cover every draw. Be comfortable in your numbers, not living on the edge.

Go or Pass: Time Matters as Much as Profit

A lot of guides tell you to chase a flat profit number, like 40 grand or nothing. I look at it differently. The question I really want answered is: how long can I sit in this loan and still break even or make money?

If I am still at break even or profitable at month 12, that is a good deal. If I am still profitable at month 18, that is a phenomenal deal, because it means I could be stuck in a high-interest hard money loan for a year and a half and still come out ahead. That time cushion is your protection when a project or a sale runs long, and it is how you prep your exit strategy on the front end instead of scrambling later.

The Fast Way: My Deal Analyzer

Everything above is the math you should understand. But you should not have to do it by hand on every deal, which is exactly why I built the Deal Analyzer. It lives inside my borrower portal, and the full tool is right here too. No login, no application, just run your deal.

It tracks every number on the deal and lets you adjust any of them: interest rate, origination points, closing costs, title fees, agent commission, anything. Change an input and watch the whole deal move. It shows you:

• Your all-in to ARV ratio, total invested including every fee, divided by the after repair value
• What happens to your numbers if you go over budget
• Your estimated cash to close and the proof of funds you need to get approved
• DSCR rates, so you can size up a refinance and hold exit, not just a sale
• A month-by-month profit breakdown, so you can see exactly how much you make if you sell at month 6 versus holding to month 12, and how long you can carry the loan before you need to refinance

This is the same analyzer that runs in the borrower portal, same math, same fees. The portal version also saves every scenario to your deal.

Inside the portal, right below the analyzer, there is also Capital Kings Intelligence, which pulls the property details for you: county, square footage, bed and bath count, crime data, and a map with the radius, flood zones, and nearby schools. There are some comps in there too. They are a quick reference, not full MLS-quality comp support, but they are there when you want a fast look.

Frequently Asked Questions