How to Analyze a Fix-and-Flip Deal in 10 Minutes

This guide is part of our Deal Analysis Toolkit series.

Most investors spend 30 to 45 minutes analyzing a single flip deal. They pull comps from three different websites, hand-enter numbers into a spreadsheet, second-guess their repair estimate, and then do it all over again when the numbers don't look right. By the time they submit an offer, someone else already has the property under contract.

With the right data and a repeatable process, you can evaluate any fix-and-flip deal in 10 minutes flat. Not a rough guess. A real analysis with comps, repairs, holding costs, selling costs, and a profit number you can trust. Here is the exact workflow, broken into five steps with time targets for each.

Step 1: Pull comps and determine ARV (2 minutes)

After Repair Value is the cornerstone of every flip analysis. Get this wrong and nothing else matters. Your ARV tells you what the property will sell for after renovation, and every other number in the analysis flows from it.

Pull 3 to 5 comparable sales within 0.5 to 1 mile of the subject property, sold in the last 6 months, with similar size and configuration. Same bed/bath count, within 20% of the square footage, same general property type. If you are in a slower market with fewer transactions, you can stretch to 9 months, but note it in your analysis.

The critical detail most investors miss: condition matching. A comp that sold unrenovated is NOT the same as one that sold fully renovated, even if they are next door to each other. If all your comps are renovated sales, your ARV reflects a renovated property. If some are distressed, you need to adjust or exclude them. Mixing renovated and unrenovated comps without adjustment is the single most common source of inflated ARVs. For a deeper dive on comp selection, see our guide on how to run comps like a pro, and for the full ARV calculation methodology, read how to calculate ARV step by step.

When you evaluate comp condition from listing photos and separate renovated from distressed, you compare renovated-to-renovated and get a tight ARV range. Without proper condition evaluation, you are guessing at the spread between as-is and after-repair values.

Step 2: Estimate repairs (3 minutes)

Repair estimation is where beginners spend too much time and experienced investors move fast. You do not need a line-item contractor bid to evaluate a deal. You need a ballpark that is accurate enough to make an offer decision. Save the detailed bid for after you are under contract.

There are three levels of rehab, and most properties fall clearly into one of them:

• Cosmetic ($10 to $20 per sqft): Paint, flooring, fixtures, landscaping. The property is structurally sound and the layout works. Kitchen and baths may need cosmetic updates but not full guts. On a 1,400 sqft house, budget $14,000 to $28,000.
• Moderate ($20 to $35 per sqft): Kitchen and bath remodel, some drywall work, possible HVAC update, roof repair (not replacement), updated electrical panel. The property needs real work but no structural changes. On a 1,400 sqft house, budget $28,000 to $49,000.
• Full gut ($35 to $60 per sqft): Everything down to the studs. New kitchen, new baths, new electrical, new plumbing, possible foundation work, roof replacement. On a 1,400 sqft house, budget $49,000 to $84,000.

Once you pick the level, add a 10 to 15% contingency. Repairs always exceed the estimate. Always. The question is by how much, and 10 to 15% covers most surprises without being so conservative that you pass on good deals. For a full breakdown of how to estimate repairs by category, see our repair estimation guide.

A drive-by or a set of exterior and interior photos is enough to categorize the rehab level. You do not need to be inside the property to determine whether it is cosmetic, moderate, or full gut. The condition of the roof, siding, windows, and landscaping tells you a lot. If photos are available from the listing or the seller, even better.

Step 3: Calculate acquisition costs (2 minutes)

Your acquisition cost is not just the purchase price. It is every dollar you spend to get the property under your control.

• Purchase price: The contract price.
• Closing costs: Title insurance, recording fees, transfer taxes, attorney fees. Budget 1 to 2% of the purchase price. On a $140K purchase, that is $1,400 to $2,800.
• Option fee: In Texas, this is typically $100 to $500 for the option period (your due diligence window).
• Earnest money: Usually 1% of the purchase price. This applies toward closing, but you need it upfront.
• Inspection cost: $350 to $600 depending on the property size. Worth every dollar on a flip where you are betting on your repair estimate.

Total acquisition cost for a $140K purchase: approximately $140,000 + $2,800 closing + $200 option fee + $1,400 earnest money + $450 inspection = $144,850. The earnest money rolls into closing, so your net additional cost above purchase price is roughly $3,450.

Step 4: Calculate holding costs (2 minutes)

Holding costs are the silent killer of flip profits. Every month you hold the property, money is draining out. Most flippers underestimate both the monthly costs and the timeline, which is why the contingency mindset matters here as much as it does for repairs.

A typical monthly holding cost breakdown on a $200K property financed with hard money:

• Hard money interest: $200K loan at 12% annual = $2,000/month
• Insurance: $150/month (builder's risk or vacant property policy)
• Property taxes: $300/month (varies by county, prorate from annual)
• Utilities: $100/month (electric and water for rehab crew)
• Lawn/maintenance: $100/month

Total monthly holding cost: approximately $2,650. On a typical 5-month hold (2 months rehab + 3 months on market), that is $13,250. If the project runs 7 months instead of 5, holding costs jump to $18,550. That extra $5,300 comes directly out of your profit.

Step 5: Calculate selling costs (1 minute)

Selling costs depend entirely on how you plan to exit. There are two main scenarios, and the difference between them can add $15,000 or more to your bottom line.

Selling retail (to a homeowner via MLS)

If you are listing the renovated property on the MLS with an agent, expect to pay 5 to 6% in total agent commissions (buyer's agent + listing agent) plus 1 to 2% in seller closing costs (title policy, recording, prorated taxes). On a $250K ARV: $15,000 commission + $5,000 closing = $20,000 in selling costs.

Selling to an investor (off-market)

If you sell to another investor, you typically skip the agent commission entirely and pay only 1% in closing costs. On a $250K ARV: $0 commission + $2,500 closing = $2,500 in selling costs. This is why many flippers cultivate a buyer list. The lower selling costs can turn a marginal deal into a profitable one.

The full formula

Profit = ARV - Purchase Price - Repairs - Holding Costs - Buying Closing Costs - Selling Costs

That is the entire flip analysis. Five inputs, one output. Everything else is detail within those five categories. Once you have the formula internalized, the only question is how accurate your inputs are.

Worked example: 3/2 in Spring, TX

Let's walk through a real-world scenario. The subject property is a 3 bedroom, 2 bathroom, 1,400 sqft single-family home in Spring, Texas (Harris County). It needs a moderate rehab. The kitchen is dated, bathrooms need full remodel, roof has 3 to 5 years left, HVAC works but is 15 years old, and the foundation appears solid.

• ARV: $235,000 (based on 4 renovated comps within 0.75 miles, sold in last 5 months, renovated with modern finishes)
• Purchase price: $140,000
• Repairs: $38,000 (moderate rehab at $27/sqft on 1,400 sqft = $37,800, rounded up)
• Holding costs: $13,250 (5 months at $2,650/month)
• Buying closing costs: $2,800 (2% of purchase)
• Selling costs (retail): $18,800 (8% of ARV: 6% commission + 2% closing)

Profit (retail exit): $235,000 - $140,000 - $38,000 - $13,250 - $2,800 - $18,800 = $22,150

That is a 15.8% return on the all-in investment of $140,000 + $38,000 = $178,000. Solid, but not spectacular. Now look at what happens if you sell to an investor instead.

• Selling costs (investor): $2,350 (1% of ARV)

Profit (investor exit): $235,000 - $140,000 - $38,000 - $13,250 - $2,800 - $2,350 = $38,600

Same deal, $16,450 more profit, simply by selling off-market to an investor. This is 27.6% ROI on the all-in cost. The difference between a decent deal and a great deal often comes down to your selling costs, which is why having a reliable buyer list matters as much as finding good deals in the first place.

Annualized ROI: the number that actually matters

Raw profit and simple ROI are useful, but they do not tell the full story. A $22K profit over 5 months is different from $22K over 12 months. Annualized ROI accounts for time.

The formula: (Profit / Cash Invested) x (12 / Months Held)

If you tie up $50,000 of your own cash (the rest financed with hard money) for 5 months and make $22,150, your annualized return is ($22,150 / $50,000) x (12 / 5) = 106.3%. If the same deal takes 8 months, annualized drops to 66.5%. Time is money in flipping, literally. This is why holding costs and timeline management are not just operational concerns. They directly determine your return on capital.

When comparing a flip to other investments, annualized ROI is the only apples-to-apples comparison. A 15% return over 5 months is better than a 25% return over 14 months, even though the raw number is lower.

When to pass on a flip

Not every deal is worth doing. Here are the clear signals to walk away:

• Profit margin under $15,000. Below this threshold, there is not enough margin to absorb surprises. One contractor delay, one low appraisal, one buyer falling through, and your $12K profit becomes a $3K loss. The risk-reward ratio does not justify it.
• Repairs exceed 30% of ARV. When rehab costs climb above 30% of your after-repair value, the execution risk is too high. A $70K rehab on a $235K ARV property means any cost overrun has an outsized impact on your return.
• Projected holding costs exceed 5% of ARV. If you are looking at $12K+ in holding costs on a $235K property, the timeline is too long or the financing too expensive. Something needs to change.
• You do not have a reliable contractor. This is not a numbers issue. It is an execution issue. The best deal in the world will lose money with a bad contractor. If you are between contractors or have not verified one on a prior project, you are gambling.

Hard money versus cash: know your true costs

The worked example above uses hard money financing at 12% interest. This is middle-of-market for 2026. Hard money terms typically range from 10 to 14% annual interest plus 2 to 3 origination points (a point is 1% of the loan amount).

On a $140K loan with 2 points, you pay $2,800 at closing just for the privilege of borrowing the money. Add that to your acquisition costs. The monthly interest at 12% is $1,400/month, which stacks on top of your other holding costs.

If you pay cash, your holding costs drop dramatically. No interest payments, no points. Monthly holding drops from $2,650 to roughly $650 (insurance, taxes, utilities, maintenance). Over 5 months, that is $3,250 versus $13,250. The $10,000 savings goes directly to your bottom line.

The tradeoff: paying cash ties up more capital and limits how many deals you can do simultaneously. Hard money lets you leverage, but the cost of that leverage eats into your margin. There is no universally right answer. It depends on your available capital, your deal flow, and your risk tolerance.

The contingency mindset

Here is a truth that every experienced flipper knows: repairs always go over budget. The timeline always runs long. The appraisal sometimes comes in low. The buyer's financing sometimes falls through. None of these are unusual events. They are the normal course of business in real estate.

Build contingency into your analysis from the start. Add 15% to your repair estimate. Add one extra month to your timeline. If the deal still works with those buffers, it is a real deal. If it only works on the best-case scenario, you are not investing. You are hoping.

The best flippers do not find magical deals that work on razor-thin margins. They find solid deals with enough margin to absorb reality. The 10-minute analysis framework above is designed to give you a realistic number, not an optimistic one. Start with real comps, honest repair estimates, and full holding costs. If the number works, move fast. If it does not, pass and find the next one.

Understanding the full spectrum of exit strategies helps you recognize when a deal that does not work as a flip might still work as a wholesale or a BRRRR. And knowing the difference between wholesaling and flipping helps you decide whether you should be taking on the rehab risk at all or simply assigning the contract.

For more on setting your offer price once the analysis is complete, see our guide on the maximum allowable offer formula. And to avoid the most common analytical errors, read the top deal analysis mistakes and how to avoid them.

Related articles

• Deal Analysis Toolkit (Pillar)
• How to Run Comps Like a Pro in 2026
• How to Calculate ARV Step by Step
• How to Estimate Repair Costs Without a Contractor
• Maximum Allowable Offer: The Formula That Protects Your Profit
• Exit Strategies Explained: Flip, Rent, Wholesale, or BRRRR
• Wholesaling vs Flipping: Which Strategy Is Right for You?
• Deal Analysis Mistakes That Cost Investors Thousands

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