A quick framework for evaluating potential deals so you never overpay for a property.
Speed matters in house flipping. Good deals don't last — they get scooped up by investors who can evaluate properties quickly and make confident offers. The ability to analyze a flip in ten minutes or less isn't about cutting corners; it's about having a repeatable framework that tells you fast whether a deal deserves a deeper look or belongs in the reject pile.
Here is that framework, step by step.
The ARV is what the property will be worth after renovations are complete. This is the anchor number for your entire analysis. To estimate ARV quickly:
If you can't find at least three solid comps, the deal becomes riskier because you're guessing at the exit value. In that case, either widen your search radius to one mile or move on to the next deal.
The 70% rule is the most widely used quick-analysis formula in house flipping. It states:
Maximum Offer = (ARV x 0.70) - Estimated Repair Costs
The 30% margin accounts for your profit, closing costs on purchase and sale (typically 2-3% each), holding costs, agent commissions (5-6%), and a buffer for the unexpected. Here is why this works: if you buy at 70% of ARV minus repairs, you have built-in protection against cost overruns, market dips, and longer-than-expected hold times.
Some experienced investors adjust the percentage — using 75% in hot markets where properties sell fast, or 65% in slower markets where longer hold times eat into returns. As a new flipper, stick with 70% until you have enough experience to calibrate the number for your local market.
You don't need a contractor's bid for a quick analysis. You need a ballpark that's close enough to tell you if the deal works. Use these rough per-square-foot benchmarks:
For a quick analysis, classify the property into one of these three categories based on photos or a drive-by. A 1,500-square-foot house needing a moderate rehab would estimate at roughly $45,000 to $90,000 in renovation costs. Use the midpoint ($67,500) for your initial calculation, and if the deal looks promising at the midpoint, dig deeper with actual contractor estimates.
Holding costs are the expenses you pay every month you own the property. They're easy to overlook and expensive to ignore. For a quick estimate, calculate monthly holding costs as follows:
Total monthly holding costs on a typical flip run between $2,000 and $3,000. Multiply by your expected hold time — usually four to six months for a moderate rehab — and add that to your total cost calculation. On a five-month project, holding costs alone could be $10,000 to $15,000.
Let's put it all together with a real scenario. You find a 1,400-square-foot, three-bedroom, two-bathroom house listed at $165,000. It needs a moderate rehab — the kitchen and bathrooms are dated, the flooring is worn, and the exterior needs paint and landscaping.
ARV Estimate: Three comparable renovated homes sold recently for $280,000, $275,000, and $290,000. Median ARV = $280,000.
70% Rule Maximum Offer: ($280,000 x 0.70) - Repair Costs = $196,000 - Repair Costs
Renovation Estimate: Moderate rehab at $45/sq ft x 1,400 sq ft = $63,000
Maximum Offer: $196,000 - $63,000 = $133,000
The property is listed at $165,000 — that's $32,000 over your maximum. At the asking price, the deal does not work. You could make an offer at $133,000, but that's a 19% discount off asking, which is unlikely to be accepted in a competitive market. This is a pass.
Now suppose the same property was listed at $140,000. Your maximum offer is $133,000, so you're only $7,000 apart. That's negotiable. You'd move to a deeper analysis: get a contractor's estimate, run accurate comps, and submit an offer with confidence.
Not every property is a deal. In fact, most aren't. Experienced flippers evaluate dozens of properties for every one they buy. Walk away when:
The first few times you run this framework, it might take 20 minutes instead of 10. That's fine. With practice, pulling comps becomes second nature, and you'll develop an instinct for renovation costs in your target market. The key is consistency: run every potential deal through the same framework, and let the numbers — not your gut — make the decision.
Keep a spreadsheet of every deal you analyze, including the ones you pass on. Over time, you'll build a database of local market knowledge that makes you faster and more accurate with every analysis.