How to Analyze a Deal: From Address to Answer
The full loop on one address: values, comps, rehab, financing, and both exits, flip and rental, in one report.
Deal analysis is where everything in the Foundations module gets used at once. The math itself was never the bottleneck: it is arithmetic. The bottleneck is assembling honest inputs fast enough to evaluate many properties.
Speed is the edge, because the investor who can analyze twenty deals a week beats the one who agonizes over two.
The five inputs, in order of importance
As-is value
What it is worth today, in today's condition. This is your downside: what you could resell for if the project stopped tomorrow.
ARV
The finished value, from renovated comps. Your upside, and the number every exit is built on.
Market rent
From actual leases, not asking prices. This decides whether the rental exit exists.
Rehab budget
Scope-based, with permits, holding, and contingency included.
Financing
Rate, points, and months held. Interest is a project cost like any other.
Run both exits, every time
Price every deal as a flip and as a rental, even when you think you know which one it is. The comparison is the point.
| The flip says | The rental says | The read |
|---|---|---|
| Thin margin | Rents strong | A keeper. The rental exit carries the deal. |
| Fat margin | Would not cash-flow | Flip only. You now know exactly what your exit must be, and how confident your ARV needs to be. |
A deal with two viable exits is structurally safer than a deal with one, at the same profit.
Stress the value, not just the rehab
Most investors pad the rehab budget and call it conservatism, then treat the ARV as a fact. Sensitivity runs the other way: the value side moves the outcome far more than the cost side.
| Rehab budget | $40,000 |
| A 10% rehab overrun costs | $4,000 |
| Exit price (ARV) | $200,000 |
| A 5% ARV miss costs | $10,000 |
| The value miss versus the cost miss | 2.5x |
The number everyone stresses (the rehab) is the smaller risk; the number everyone treats as fact (the ARV) is the bigger one.
So re-run every deal at ARV minus five percent. If the answer flips from yes to no, you do not have a deal. You have a bet on your best-case comp.
Run one real address through the Deal Analyzer end to end: check the comps behind the values, set a scope-based rehab, add your financing, and read both exits. Then drop the ARV five percent and see what survives. Twenty minutes, and you will have done more real analysis than most people do before buying.
Put this lesson to work on a live address.
Open the Deal Analyzer
