Resources To Help You Analyze An Investment Real Estate Deal

As a service to our VIP and Preferred Investment Property Buyers… we’ve created a few educational resources. If you’re newer to buying investment properties you’ll get a lot from this page. If you’re experienced… there may be a tool or two below that’ll help make things easier for you.

1. Understand the Investor Strategy Before Running the Numbers

Every deal must be analyzed through the lens of your strategy. Common investor categories include:

• Fix & Flip
  Focus on ARV, repair budget accuracy, holding costs, and days-on-market.
• BRRRR (Buy, Rehab, Rent, Refinance, Repeat)
  Prioritize cash flow, after-repair rental comps, DSCR, and long-term refinance viability.
• Buy & Hold Rentals
  Evaluate cap rate, cash-on-cash return, rent comps, and maintenance reserves.
• Wholesale Assignment
  Ensure a strong equity spread between your contracted price and true investor value.

Before touching a calculator, confirm your strategy. That dictates your target numbers.

2. Calculate the ARV (After-Repair Value) with Precision

The ARV is the foundation of nearly every investment decision. It represents the value of the property after renovations.

Use:

• Comparable sales within 0.5–1 mile
• Same property type (SFH vs. multifamily)
• Similar square footage ±20%
• Renovation level (cosmetic vs. full rehab)
• Sold within the last 3–6 months

A precise ARV prevents overpaying and protects your downside.

Pro Tip: Always favor recently renovated comps to mirror your projected condition.

3. Estimate Repair Costs Accurately

Repair estimates should be grounded in your market’s pricing and based on a realistic scope of work:

• Roofing
• HVAC/electrical/plumbing
• Kitchen + bath upgrades
• Flooring
• Interior/exterior painting
• Foundation/structural
• Landscaping
• Permits & contingency

Most investors use:

• $15–$25/sq ft for light cosmetic
• $30–$45/sq ft for mid-level renovation
• $50–$70+/sq ft for full gut rehab

Accurate rehab numbers determine whether the deal pencils out or becomes a liability.

4. Apply the 70% Rule (Fix & Flip Baseline)

A commonly used framework:

MAO (Max Allowable Offer) = ARV × 70% − Repair Costs

This formula ensures:

• Profit margin
• Holding costs
• Realtor fees
• Cost of capital
• Risk buffer

While not universal, it’s a reliable starting point for flip investors evaluating single-family deals.

5. Evaluate Rental Performance & Cash Flow

For rental and BRRRR deals, prioritize:

• Market rent comps
• Cap rate (NOI ÷ Purchase Price)
• Cash-on-cash return
• Vacancy rate
• Maintenance & CapEx reserves
• Property management fees
• DSCR (Debt Service Coverage Ratio)

Strong rentals generate predictable monthly performance and long-term appreciation.

Benchmark Targets:

• Cap Rate: 6–10% (market dependent)
• Cash-on-Cash Return: 8–15%+
• DSCR: 1.20–1.40+

6. Analyze Neighborhood & Market Trends

Smart investors don’t buy properties—they invest in locations.

Look for:

• Population growth
• Job diversity and new developments
• School ratings
• Crime statistics
• Nearby employers and infrastructure
• Rental demand
• Days-on-market trends

These factors affect appreciation, liquidity, and tenant quality.

7. Stress-Test the Deal

Before committing, run the “stress test”:

• What if rehab runs 10–20% over?
• What if ARV drops by 5–10%?
• What if vacancy lasts 60–90 days?
• What if interest rates change before refinance?

This ensures financial durability under real-world conditions.

8. Use Proven Deal-Analysis Tools

Investors should consider using:

• Deal calculators
• ARV analyzers
• Rent comp tools
• Rehab estimators
• DSCR calculators
• Cash flow sheets
• Market data dashboards

Southern Properties United provides streamlined investor tools and vetted resources so buyers can evaluate deals confidently and efficiently.

9. Review Title, Liens, Permits & Compliance

A deal isn’t a deal until it’s clean.

Confirm:

• Clear, insurable title
• No outstanding liens
• HOA rules (if applicable)
• Open permits
• Property boundaries
• Municipal inspection requirements

This protects you from costly legal surprises.

10. Make Data-Driven Decisions

Profitable investing comes from consistency — not guesses. Every property should be measured against:

• Strategy fit
• Risk tolerance
• Cash flow thresholds
• Equity minimums
• Market trends
• Rehab feasibility

The better and tighter your process, the stronger your long-term returns.

Importance Of Evaluating Deals Correctly

Conclusion: Professional Deal Analysis Builds Better Portfolios

Analyzing a real estate deal is about mastering the numbers, understanding the market, and aligning the opportunity with your goals. Southern Properties United equips investors with the tools, comps, and insights needed to make confident, profitable decisions.

Whether you’re a seasoned buyer or evaluating your first deal, our team supports every step of the process with transparency, speed, and value-driven opportunities.

As a real estate investor, you can make or break your investment when you buy. Pay too much for a property and you could lose your shorts. Get a great deal on a property and it makes all the difference in the world. Here at Southern Properties United, LLC, we feel it’s our duty to help you get the best deals you possibly can… and a big part of that is knowing your numbers. It’s in our best interest as well to help you become the best investor you can… so you keep coming back to us to buy great discounted properties.

Deal Evaluation Resources

• Simple Deal Evaluation Spreadsheet – Use this Excel spreadsheet to calculate your target offer price, profit, and more. (requires Microsoft Excel to work)
• Property Repair Checklist – Helps you keep track of repair costs so you can build them into your offer