Flippers- mind sharing how you evaluate deals?

Question

Hey everyone,  flippers— I’d love to learn more about how you actually break down deals when they hit your inbox.

If you’ve got a few minutes and are down to share how you evaluate offers, what slows you down, or what tools you use (if any), I’d really appreciate it. I’m not selling anything.

Drop a comment or DM me if you're open to chatting!

Andy Sabisch · Answer

Two things to remember when you go with a wholesaler . . . the ARV is often inflated and the repair costs are usually low so what looks like a good deal is often far from it when you get into it.  We have seen a number of wholesale properties that went for far more than they should of and then are sitting on the back end because the sales price is too high and has to in order to break even.  As they say, you make your money on the buy and over estimating the sales price especially looking months down the road where anything can upset the market to spending more than you expected will kill flips.  One bad one can wipe out 5 good ones so be sure of your numbers and never rely on what a wholesaler is telling you (they want you to buy it not make money).  We have found one decent wholesaler after meeting with more than a dozen and it was clear that the rest knew very little about comps and repair costs. There are people making money doing flips out of town but we do not have traveling crews of a network of GCs around the country so we try to stay where we can keep an eye on things.  Knowing the area, having local contractors you can call to get good numbers and making sure the buy is right are key.

Marc Rice · Answer

Hey Druce, I use the local MLS to evaluate deals. On my BP profile you can learn more about my experience in Ohio and resources I have in the local area. I generate my own off-market leads but when I get deals from wholesalers, it's a different number game. Happy to share my methods and experience with you.

Kerlous Tadres · Answer

Running your comps right. You’ve got to get your ARV right. I pull comps within 0.5–1 mile, sold in the last 3–6 months, and try to match bed/bath, square footage, and condition as closely as possible. I usually grab at least 3 solid ones before I feel good about the number. Tools like Redfin, Zillow, PropStream, or MLS (if you have access) make this easier. Don’t forget to adjust for stuff like garages, upgrades, or big lot size differences.

This is where people either lose money or make it. I break everything into categories: mechanicals (HVAC, plumbing, electric), cosmetics (kitchen, baths, flooring, paint), and structural/exterior (roof, windows, landscaping).

As a quick guide:

• Light rehab: $10–$20/sq ft
• Medium: $20–$35/sq ft
• Heavy/full gut: $35–$60+/sq ft

Light rehab: $10–$20/sq ft

Medium: $20–$35/sq ft

Heavy/full gut: $35–$60+/sq ft

But nothing beats walking the property with a contractor and building out a solid scope of work. I’ve also used tools like Rehab Valuator to help tighten up the numbers.

Finding good contractors is a challenge. I usually go off referrals (investors, REIA groups, etc.), always check licenses and insurance, and I like to start with smaller jobs to test them out before handing them a full rehab. I also structure payments in milestones—never all up front.

Nicholas L. · Answer

@Druce Asah

happy to share

one challenge is just finding deals at all - there is competition on the best ones and the price can get bid up just like an on-market deal

Jimmy Lieu · Answer

Hi Druce, I actually recently made a Youtube video on how to analyze flip deals! More than welcome to send you that YT video for you to review and share my flip deal analysis calculator as well. Happy to connect and answer any questions you have!

Remington Lyman · Answer

I will close the deal if I can secure a profit of forty thousand.

Keenan Cromshaw · Answer

1) ARV: verified by a reliable agent that will tell what finishes and upgrades are needed based on comps. If you're trying to do it yourself first, find pending and sold comps that have sold within the last 3 months +/- 250sq ft of your potential flip property.

2) Rehab: finding a reliable contractor, then ALWAYS estimating 10% above the estimate. I found mine through my investor friendly agent, who was also my mentor (I didn't have my license at the time either).

3) Project time: combination of your contractor rehab estimate and expected time on the market based on the local market, verified by your agent. For a single family home, my total project time has usually been around 4-6 months.

4) Relaible calculator: there are  a lot of other important factors that go into this, but having a reliable and accurate calculator that is verified by another investor in your area is extremely important in calculating deals.

Hope that helps, let me know if you have other questions!

-ps: don't trust wholesaler numbers!!

Peter Mckernan · Answer

You are asking the right crowd.. The thing about deals is making sure the actual outprice on the fix and flip is accurate. The out price will give you the in-price and variables that can save the deal is getting your rehab costs down to an exact amount (even without seeing the place with your contractor). The other thing that I would be evaluating is holding costs, cash is nothing, but holding costs can create an issue if you have an increasing rehab cost on the project along with long hold times.

Use a seasoned realtor/real estate agent to run comps with you until you feel good on your own to do this..

If you are looking at the wholesaler side of things, be correct on the ARV, and truly get the deal on price off that ARV amount. Signing  contracts to sign contracts and try to make money then after 15-30 days not closing due to not finding a buyer gets you to a place with a bad business and no referrals to lower your customer acquisition.

Druce Asah · Answer

@Nicholas L., thank you for your response. I was referring more about the process when using the wholesaler method. Do you use that method and deal with the emails?

Gina Stern · Answer

Hey Druce are you thinking about buying a foreclosure for flipping, as there are going to be some interesting opportunities coming up in the not to distant future. There are many online tools that I use to get an ARV, if you direct message me I can share those with you. Let me know.

Flippers- mind sharing how you evaluate deals?

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