I’ve seen this play out a lot.
Someone finds a house that looks like a “deal”, runs a few numbers in their head, imagines a clean white kitchen and a nice profit. And then they buy it. And only after that, reality shows up. The roof is worse than they thought. The layout is weird. The comps were off. The neighborhood is not what the listing photos suggested.
So here’s what I do now. I give myself 10 minutes. Not to fully underwrite the thing like an institutional buyer. Just to filter. To decide if this deal deserves another hour of my life.
It’s not fancy. But it’s fast, and it catches the stuff that kills flips.
Below is the exact 10 minute evaluation. Set a timer if you want. If it passes, you go deeper. If it fails, you move on and don’t romanticize it.
Minute 1: What’s the exit price, really?
Start with ARV. After repair value. The number everyone loves to inflate. Pull 3 to 6 sold comps. Not active listings. Sold.
Quick rules that keep you honest:
• Same neighborhood or as close as possible. Not “within 2 miles” if 2 miles crosses a school boundary or a totally different pocket.
• Similar bed and bath count. Similar gross living area. If your house is 1,200 sq ft, don’t use a 1,800 sq ft comp because it’s the only pretty one.
• Same style if possible. Ranch to ranch. Split level to split level. Older to older. Then do the annoying part. Adjust mentally for obvious differences.
If your subject has no garage and the comps do, your ARV is not their sale price. If your subject backs to a busy road, same thing. If your subject has one bath and the comp has two, you’re not “adding a bath later” unless you’re truly adding it in the scope and you know you can.
In this first minute, you just want a conservative ARV range. Not a single magical number.
Write down a low ARV and a high ARV. If you’re only comfortable with the high ARV, that’s already a red flag.
Minute 2: Is the neighborhood a flip neighborhood?
This sounds obvious, but people skip it because it’s not a spreadsheet thing. Ask:
• Are renovated homes actually selling here, quickly?
• Or do “updated” homes sit because buyers in this area don’t pay up for finishes? • Are there investor resales in the last 6 to 12 months?
• Is this street decent compared to the surrounding streets?
A flip can be a great deal in a mediocre neighborhood. It’s just a different flip. Different finishes, different buyer, different expectations.
If the area supports $350k turnkey homes and you’re trying to create a $500k product because you saw a comp from a nicer pocket, you’re building a house nobody asked for.
Also. Look at the junk factor.
If the neighboring yards are full of broken cars and trash, if there are clearly neglected homes right next door, your buyer pool shrinks. That’s not moral judgment. It’s just demand.
Minute 3: The “why is it cheap” check
Every deal has a reason.
In one minute, try to figure out the real reason the price is low:
• Fire damage?
• Foundation issues?
• Title problems?
• Tenant situation?
• Ugly but simple?
• Major functional obsolescence?
• Located on a horrible corner?
If it’s “ugly but simple”, that’s the sweet spot. Dated finishes, gross carpet, old kitchen, bad paint, overgrown yard. Fine.
If it’s structural, legal, or location based, that’s not automatically a no. But it is automatically a slower, more expensive project. And you should treat it like one.
This step prevents you from falling for cosmetic photos while the real problem is off camera. Minute 4: Do a rough rehab number, not a fantasy
This is where people torch profits. They underestimate rehab, then they “value engineer” mid project, and the finished house looks cheap, and then it sits, and then price drops happen, and the profit vanishes.
In minute 4, you’re not building a line item budget. You’re using a fast square foot heuristic and then adjusting for big ticket items.
A quick starting point that many flippers use (varies by market, obviously): • Light rehab: $20 to $35 per sq ft
• Medium rehab: $35 to $60 per sq ft
• Heavy rehab: $60 to $100+ per sq ft
Then add or adjust for the stuff that breaks heuristics:
• Roof needed soon?
• HVAC old or missing?
• Electrical panel outdated or knob and tube?
• Plumbing issues?
• Foundation cracks, sloping, water intrusion?
• Windows shot?
• Full kitchen and full bath replacements?
If the home is 1,400 sq ft and you think it’s a medium rehab, you might start at, say, $50 per sq ft. That’s $70,000.
Now your job is not to lower that number. Your job is to see if it’s missing something that pushes it to $85,000. Because it often does.
Be conservative. You can always be pleasantly surprised later.
Minute 5: Holding costs in one line
Holding costs are death by a thousand cuts. It’s not the big punch, it’s the drip. In this minute, estimate:
• Interest on your money (or hard money interest)
• Taxes
• Insurance
• Utilities
• Lawn and snow
• Trash and basic maintenance
• HOA if applicable
You don’t need perfection. You need a monthly number.
Example logic:
If your loan is $250,000 at 12% interest only, that’s $2,500 per month just in interest. Add maybe $400 to $900 per month for everything else depending on taxes and insurance.
Call it $3,200 per month.
Then assume a timeline. And don’t assume your timeline. Assume the timeline that happens when something goes wrong.
If you think it’s a 3 month rehab, use 5. If you think it’s 5, use 7.
Write:
Holding cost estimate = monthly holding x months
Done.
Minute 6: Selling costs, yes they matter
People forget how expensive it is to sell a house.
Quick estimate:
• Agent commissions (often 5 to 6% total, sometimes less, but be honest) • Seller closing costs (varies, but there are always fees)
• Transfer taxes if your state has them
• Staging and photos (optional but often worth it)
• Buyer concessions (in some markets this is normal again)
A fast way:
Selling costs = 7% to 10% of ARV
In some places you can be closer to 7%. In others, 10% is safer. If your market is slow, assume you’ll pay to move it.
If that number makes the deal look thin, that’s not the selling cost being unfair. That’s the deal being thin.
Minute 7: The rule that forces discipline (choose one)
You need a go or no go rule. Something that isn’t vibes.
Two common ones:
Max Offer = (ARV x 0.70) – Rehab
It’s blunt. It’s not perfect. But it bakes in a margin for holding, selling, and profit.
In hot markets, people break this rule and still make money. In normal markets, this rule saves you.
Decide your minimum net profit target and don’t apologize for it.
Maybe it’s:
• $30,000 minimum net for a small flip
• Or $50,000 minimum net for anything involving heavy rehab
• Or a percentage return on cash invested
Then do the quick equation:
Net Profit = ARV – Purchase Price – Rehab – Holding – Selling – Financing fees If you can’t hit your minimum profit with conservative numbers, it’s not a deal. It’s a project.
Pick one rule and stick to it. Otherwise you’ll negotiate against yourself. Minute 8: The “deal breaker” scan (walk through fast)
This minute is just a checklist. You’re looking for stuff that turns a flip into a nightmare. Big deal breakers or at least big slow downs:
• Foundation issues you can’t confidently price
• Active water intrusion, mold smell, major rot
• Septic or well problems without clear documentation
• Unpermitted additions that are obviously part of value
• Bad layout you can’t fix without big money (tiny kitchen in the middle, weird bedroom access, low ceilings)
• Road noise, railroad, commercial backing, awkward lot
• Severe neighbor issues, like truly severe
Also look for “death by permit” situations:
If your plan requires moving plumbing, changing structural walls, adding bedrooms, changing footprint. You might be signing up for months of plans and inspections. Which is fine. But it changes holding costs, risk, and your required margin.
If you’re new, avoid deals where the rehab scope is hard to describe in a sentence. Minute 9: Your buyer. Who is it, specifically?
This is a fast mental exercise that saves you from over improving.
Ask:
Who buys renovated homes here?
• First time buyer using FHA?
• Young families needing good schools?
• Downsizers wanting one level?
• Investor landlords (so your exit might actually be a rental sale)?
• Higher end buyers who care about design and layout?
Then match your rehab to that buyer.
If it’s an FHA heavy area, you should care about safety items, handrails, peeling paint, functioning systems, and clean, durable finishes. You don’t need imported tile and a $6,000 range.
If it’s an area where buyers pay up for design, you probably need better lighting plans, better layout choices, and not just “gray everything”.
If you can’t picture the buyer, you’re guessing. And flips don’t like guessing. Minute 10: The stress test (two quick scenarios)
Last minute. You do two quick stress tests.
Take your rehab number and multiply by 1.2.
Still profitable? Still worth it?
Take your low ARV and reduce it by 5%.
Still profitable? Still safe?
If both stress tests kill the deal, it’s fragile. Fragile deals tend to break.
And yes, sometimes you take a fragile deal anyway because you have a unique advantage. Crew in house, materials cheap, you know the area extremely well, you got a crazy good purchase price, you can do the work yourself.
But you should know you’re doing that. Not accidentally doing that.
A simple 10-minute template you can copy into your notes
This is what it looks like in real life. Not pretty. Just usable.
• ARV (low/high): $____ / $____
• Comps used: 1) ____ 2) ____ 3) ____
• Neighborhood check: sells fast? Y/N. buyer type: ____
• Why cheap: ____
• Rehab estimate: $____ (light/med/heavy)
• Holding: $____ per month x ____ months = $____
• Selling costs: % of ARV = $
• Offer rule: 70% rule / min profit rule
• Max offer: $____
• Deal breakers: ____
• Stress test: rehab +20% profit = $. ARV -5% profit = $
• Decision: Pass / Dig deeper / Offer
If you do this 20 times, you’ll get fast. And more importantly, you’ll get consistent. Consistency is what stops you from buying the deal that “felt right” and then wrecked your year.
A few quick notes that save you from yourself
These aren’t part of the 10 minutes, but they’re the lessons behind it.
A pretty finished product can still be a terrible purchase. The deal is the spread. Not the house. Good rehab can’t fix a bad buy. It can hide it for a while, but it can’t fix it.
If your flip ties you up for 9 months instead of 4, that affects your money, your attention, your ability to take the next deal. Even if you “still made profit”.
If your highest comp requires conditions your property doesn’t have, stop using it. Don’t let one outlier sale become the anchor for your entire plan.
Let’s wrap this up
A fix and flip doesn’t need a 47 tab spreadsheet on day one. It needs a fast filter that’s conservative and repeatable.
So run the 10 minute evaluation:
1. Conservative ARV range
2. Neighborhood reality check
3. Why it’s cheap
4. Rehab estimate with big ticket adjustments
5. Holding costs
6. Selling costs
7. A clear offer rule
8. Deal breaker scan
9. Identify the buyer
10. Stress test it
If it passes, great. Now you earn the right to slow down, walk the property, get contractor bids, verify comps properly, and negotiate like you mean it.
If it fails, also great. You just saved yourself months of stress and a very expensive lesson. FAQs (Frequently Asked Questions)
The 10-minute evaluation serves as a quick filter to determine if a potential house flip deal deserves further detailed analysis. It helps catch deal killers early, saving time and preventing romanticizing properties that aren’t viable investments.
To estimate ARV, pull 3 to 6 sold comps that are in the same neighborhood or as close as possible, with similar bed/bath counts, living area, and style. Adjust mentally for differences like garage presence or location factors. Write down a conservative low and high ARV range to avoid overestimating.
Assess whether renovated homes sell quickly in the area, if updated homes command premium prices, recent investor resales within 6-12 months, and the street’s condition relative to surroundings. Also consider ‘junk factor’ like neglected yards or broken cars nearby which can reduce buyer demand.
Understanding why a property is cheap—such as fire damage, foundation issues, title problems, or being simply ugly but structurally sound—helps gauge project complexity and risk. Cosmetic issues are easier fixes; structural or legal problems require more time and money and affect profitability.
Use square foot heuristics based on rehab intensity: light ($20-$35/sq ft), medium ($35-$60/sq ft), heavy ($60-$100+/sq ft). Then adjust for big-ticket repairs like roof replacement, HVAC updates, electrical or plumbing issues. Be conservative and expect costs could be higher than initial estimates.
Include monthly expenses such as loan interest (or hard money interest), property taxes, insurance, utilities, lawn care, snow removal, trash services, basic maintenance, and HOA fees if applicable. Estimating these helps avoid profit erosion from ongoing carrying costs during the flip.