Start with the numbers, then find out which numbers you can trust. A property can look good in a message and fall apart when you check the repairs, financing, income, or time it will take to get it ready. The first estimate helps you decide what deserves a closer look. It doesn't finish the job.
In my deal-analysis training, I use a simple formula to work through a possible flip. In my contract-checklist recording, I show the work that follows an accepted offer. Put those lessons together and you have two different responsibilities: decide whether an opportunity is worth pursuing, then verify the facts and manage the obligations before closing.
Decide what you are buying the property to do
Are you planning to renovate and sell, hold it as a rental, or pursue a different exit? Write that down first. A projected resale value doesn't tell you whether a rental can cover its monthly costs. A strong rent estimate doesn't tell you what a renovation will cost or when a lender needs to be repaid.
If you already own properties, bring those operating lessons into the next purchase. Look at what your team can handle, how much cash the business can commit, and which problems you are willing to take on. Your buying criteria should reflect those limits.
Use a quick offer screen for its intended purpose
For the flip example in the recording, I start with after-repair value, or ARV: the estimated value after the planned work is complete. The initial screen is ARV × 70% − estimated repairs.
Here is the training example, with the assumptions clearly labeled:
| Input or calculation | Illustrative amount |
|---|---|
| Assumed after-repair value | $250,000 |
| 70% of that assumed value | $175,000 |
| Assumed repairs | $40,000 |
| Initial purchase-price screen | $175,000 − $40,000 = $135,000 |
That $135,000 result depends on two estimates you still need to support. It is not a purchase recommendation. In the recording, I also explain that the formula is not absolute. The property, market, costs, timing, and risk can change what makes sense.
At a $135,000 purchase price, the assumed $250,000 value less purchase and repairs leaves a $75,000 gap. That gap is not net profit. Financing, closing, carrying, selling, and other project costs still have to come out. Don't treat a 30% allowance as a promised margin, and don't use a flip screen as proof of rental cash flow.
Replace the guesses with evidence
A seller's price is a starting point for a conversation. It isn't evidence that your plan works. Keep a short record of where each important number came from, when it was checked, and what still needs review.
FROM AN INTERESTING PROPERTY TO AN INFORMED DECISION
- Screen the fitChoose the intended strategy and test the initial assumptions.
- Verify the factsCheck value, condition, occupancy, income, costs, and financing.
- Track the obligationsGive contract tasks an owner, deadline, and evidence of completion.
- Review the decisionUpdate the numbers and resolve open issues before committing further.
| Assumption | What to check |
|---|---|
| Resale value | Relevant comparable sales, the planned finished condition, and the local market. Have the valuation reviewed by an appropriate local professional. |
| Repairs and schedule | Access, inspections, a written scope, and current estimates from the people doing the work. Record what the estimate excludes. |
| Rental income and occupancy | Leases, rent roll, actual collections, deposits, vacancy, and local rental evidence. Separate existing income from projected income. |
| Operating costs | Actual bills and proposed costs for the next owner, including insurance, taxes, management, maintenance, and reserves. |
| Financing and cash required | Proposed written terms, fees, payments, funding conditions, cash you supply, and the repayment plan. |
| Title, access, and obligations | The agreement and professional review of ownership, title issues, occupancy, deadlines, and any conditions that affect the purchase. |
Check what happens if the work takes longer, costs more, or produces less income than expected. Write down how you would fund the difference and whether the deal still fits your business. If a missing fact could change the decision, keep it visible until it is resolved.
For a hold, work through the rental cash-flow review. For any financed purchase, bring the proposed terms into the financing plan. Those are separate checks from the initial offer formula.
Give the contract checklist an owner
In my contract recording, I walk through the checklist my team uses after a property is under contract. The useful part isn't a particular number of boxes. It is having one place to see what needs to happen and who is handling it.
Keep the signed agreement, copies, property records, and key dates together. Work with the appropriate closing, title, legal, lending, inspection, and insurance professionals for that transaction. Required deposits, deadlines, rights, and documents depend on the agreement and local requirements; don't copy those from somebody else's deal.
- Documents and dates: Confirm the signed documents, copies, required deposits, and time-sensitive obligations.
- Property and financing checks: Track inspections, written repair estimates, lender requirements, any required appraisal, and suitable insurance.
- Title and unresolved issues: Have the appropriate professional explain the title information and what must be addressed. Record the answer and follow-up action.
- Before closing: Review the actual condition and occupancy, the settlement documents, charges, funding arrangements, and any outstanding conditions with your team.
- Property handoff: Arrange keys, utilities, operating records, leases, tenant information, and final document storage. Gather the records you need before closing when possible.
For each open item, record the next action, responsible person, deadline, and evidence of completion. A checkmark should mean the work was confirmed, not that somebody sent an email asking for it.
Before sending closing funds, independently confirm the instructions with a trusted closing representative through a previously verified phone number or in person. The CFPB's mortgage-closing fraud guidance explains why email instructions alone are not enough. That resource addresses homebuyers; it is linked here for the payment-verification precaution.
Update the deal when the facts change
Don't keep defending the first spreadsheet after an inspection, loan proposal, or occupancy check tells you something different. Update the cost, timing, cash required, and expected outcome. Bring unresolved issues to the appropriate professional before the relevant deadline.
You may decide to proceed, seek a different price or terms, or pass where your agreement permits. A checklist does not create a right to cancel or guarantee that a property is safe to buy. It helps your team see the facts and handle the decision with fewer surprises.
Questions that come up when reviewing a deal
Does the 70% rule tell me what every property is worth?
No. In the training it is an initial flip-offer screen using an assumed after-repair value and repair budget. It isn't an appraisal, a full project budget, or a universal buying rule.
Can a property pass that screen and still lose money?
Yes. Incorrect value or repair assumptions, financing and operating costs, delays, or a different outcome can change the result. Check the complete plan rather than relying on one calculation.
What should I do when an important fact is missing?
Write down the question, who will verify it, and the deadline that matters. Review any contractual implications with the appropriate professional. Don't mark an unknown as complete just to move the deal along.
Can someone else manage the checklist?
A coordinator can track documents and follow-ups. Keep the investment decision with the responsible decision maker and the specialist reviews with the appropriate professionals.
Go deeper with the original lessons
The simple math behind a real estate deal walks through the initial offer example. The contract-to-closing checklist covers the team's transaction process. The matching deal-analysis podcast and video are below.