How to analyze a fix-and-flip deal.

Every successful fix-and-flip analysis follows the same fundamental sequence. Experienced investors may complete this process in 15 minutes for a straightforward deal; beginners should allocate an hour or more until the workflow becomes second nature. Vortonic's platform compresses this to under 2 minutes for any property in the country.

The six steps are: source the deal, run comps, calculate ARV, estimate repairs, run the 70% rule, and project profit. Skip any step and you're gambling instead of investing.

Before you can analyze, you need deal flow. The most common sources for fix-and-flip properties include the MLS (listed properties priced below market), auction platforms (foreclosures and tax liens), wholesalers (off-market assignments), direct mail campaigns, and driving for dollars.

Each source has different economics. MLS deals offer certainty and disclosure but more competition. Wholesale deals offer better prices but require faster decisions. Auction properties can be deeply discounted but carry more risk. Our complete guide to finding flip deals covers each source in detail.

The key principle: analyze many, buy few. Top investors analyze 50–100 deals for every one they purchase. The more deals you screen, the more selective you can be — and selectivity is what drives ROI. See our guide on scaling deal flow to learn how to dramatically increase your analysis volume.

Pull 3–6 recently sold properties that match the subject property's post-renovation profile. Focus on properties within 0.5–1 mile that sold in the last 90 days in similar renovated condition.

Key matching criteria: similar square footage (within 15%), same bed/bath configuration, comparable lot size, similar style (ranch, colonial, etc.), and — critically — similar renovation level. A distressed sale is not a valid comp for a renovated ARV.

This step is where many investors cut corners, using Zillow estimates or a single comp. Don't. The quality of your comps determines the accuracy of everything downstream. Our ARV calculation guide covers comp selection methodology in depth.

With your comps pulled, adjust each one for differences from your subject property (square footage, bed/bath, garage, condition, lot, location) and calculate a weighted average. Weight recent, close, and minimally adjusted comps more heavily.

In cooling markets, apply a 3–5% confidence discount to account for market drift during your holding period. In stable or rising markets, your adjusted average is your working ARV.

Use our free ARV calculator to walk through this process interactively, or let Vortonic's AI ARV engine do it automatically.

Build your renovation estimate room by room, not as a single lump sum. A detailed estimate catches costs that a rough number misses.

Kitchen: $12,000–$45,000 depending on scope. Cabinet refacing ($5K) vs. full custom replacement ($25K). Granite counters ($3K–$5K). Appliance package ($2K–$6K). Backsplash, lighting, flooring.

Bathrooms: $5,000–$20,000 per bathroom. Vanity, tile, fixtures, toilet, tub/shower. A full gut with new plumbing runs higher.

Flooring: $3–$8 per SF installed. For a 1,500 SF home, budget $4,500–$12,000 depending on material.

Major systems: New roof ($8K–$15K), HVAC replacement ($5K–$10K), electrical panel upgrade ($2K–$4K), plumbing overhaul ($3K–$8K).

Exterior: Paint ($3K–$6K), landscaping ($2K–$5K), siding repair ($3K–$12K), driveway ($2K–$5K).

Always add a contingency: 15% for properties you can inspect thoroughly, 20–25% for properties with limited access (auctions, occupied). Hidden issues — foundation, mold, asbestos, structural damage — can add $10,000–$40,000 to your budget.

Use our rehab cost estimator to build a detailed, room-by-room budget with location-adjusted cost ranges.

The 70% rule is the industry-standard formula for calculating your Maximum Allowable Offer (MAO):

The 30% spread covers your profit margin, closing costs (buying and selling), holding costs, and a buffer for the unexpected. In competitive markets, some investors push to 75% — but this leaves very little room for error. In cooling markets, experienced investors drop to 65%.

If the asking price exceeds your MAO, walk away. Discipline at this step is the single highest-leverage decision in the entire flip process. The deal you don't do is often more valuable than the marginal deal that erodes your average ROI.

Use our free MAO calculator to quickly check whether a deal meets your criteria.

The 70% rule gives you a quick pass/fail, but a full profit projection accounts for every cost in the deal. Here's what to include:

Acquisition costs: Purchase price + closing costs (title, escrow, inspection — typically 1–2% of purchase price).

Renovation costs: Your detailed rehab estimate + contingency.

Holding costs: Monthly carrying costs × projected months. Include: mortgage/hard money interest, property taxes (prorated), insurance, utilities, HOA fees. For a $180,000 acquisition with hard money at 11.5%, monthly interest alone is $1,725.

Selling costs: Agent commissions (5–6%), seller closing costs (1–2%), staging ($1K–$3K), photography ($300–$500). On a $250,000 sale, total selling costs run $15,000–$20,000.

Net profit: Sale price − (acquisition + renovation + holding + selling costs). ROI: Net profit ÷ total cash invested.

Our flip profit calculator handles all of these calculations automatically, including amortization of financing costs and projected ROI at different sale prices.

Let's apply the full framework to a real-world scenario.

The deal: A wholesaler brings you a 3-bedroom, 2-bathroom ranch, 1,380 SF, built in 1978. The property needs a full cosmetic renovation — kitchen, bathrooms, flooring, paint, and minor exterior work. The assignment price is $105,000.

Decision: The asking price of $105,000 exceeds the MAO of $96,400 by $8,600. However, the deal still projects a $25,300 profit (17.9% ROI) with conservative estimates. This is a judgment call: an experienced Memphis operator with reliable contractors might take this deal. A beginner should counter-offer at $96,000 or walk away.

This walkthrough illustrates why the 70% rule is a starting point, not the final word. The full profit analysis provides the nuance needed to make smart decisions. Use our flip profit calculator to model your own deals with this level of detail.

1. Follow the six-step framework for every deal. Skipping steps is how investors lose money.

2. ARV accuracy is the single most impactful variable. Invest the time to calculate it properly.

3. The 70% rule is your quick filter. The full profit analysis is your decision tool.

4. Analyze more deals. Selectivity is the biggest driver of returns.

5.Use technology to speed up analysis without sacrificing accuracy. Vortonic's platform compresses this entire workflow to under 2 minutes.