What actually slows you down when analyzing a deal?
Austin, Travis County · Member since 2026 · 13 posts · 3 votes
What actually slows you down when analyzing a deal?
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Jimmy LieuBusiness Member
Real Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesQuote from @Nicholas Alexander Guerrero:
For those actively buying or analyzing residential investment properties, what part of deciding whether a deal actually works takes you the most time or creates the most uncertainty?
Rehab costs? ARV? Rent assumptions? Financing? Due diligence? Keeping everything organized? Something else?
I’m especially curious what your process looks like when a property first catches your attention and you’re trying to decide whether it’s worth pursuing further.
Not looking for anyone to share proprietary spreadsheets or anything — mostly interested in how other investors approach the problem and where the process still feels unnecessarily difficult.
Jimmy Lieu, Red 1 Realty4.9121 Reviews
9 Replies
- 2moJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
@Nicholas Alexander Guerrero From a SFR and BRRRR strategy investor's prospective the most time consuming part is finding a good deal. Without a good deal your target ARV (forced equity) or cash-flow goals are impossible to achieve. I'd say 90% of the houses on the MLS don't work, 7% warrant good analysis, and 3% are worth an offer when you're activity trying to buy property.
The second part is estimating your rehab. Once you have done 2-3 properties and hired the same crew that part gets easier and less time consuming. Our contractors actively tell me what's wrong with my rentals or SOW. There's surprises but you learn to tailor the deal (negotiate) and rehab (material or SOW) to met your goals.
Financing is probably the 3rd issue (maybe 1st if you're green and young), but it's not time consuming. You either live below your means, save for a few years, or find a partner. Once you have experience people are willing to lend you money for a 10% ROI after a 5 month flip or BRRRR deal. They're beating the stock market, you're getting equity or profit, and it's repeatable if you're motivated and the market is right.
- Austin, Travis County · Member since 2026 · 13 posts · 3 votes2mo
Quote from @Jaron Walling:
@Nicholas Alexander Guerrero From a SFR and BRRRR strategy investor's prospective the most time consuming part is finding a good deal. Without a good deal your target ARV (forced equity) or cash-flow goals are impossible to achieve. I'd say 90% of the houses on the MLS don't work, 7% warrant good analysis, and 3% are worth an offer when you're activity trying to buy property.
The second part is estimating your rehab. Once you have done 2-3 properties and hired the same crew that part gets easier and less time consuming. Our contractors actively tell me what's wrong with my rentals or SOW. There's surprises but you learn to tailor the deal (negotiate) and rehab (material or SOW) to met your goals.
Financing is probably the 3rd issue (maybe 1st if you're green and young), but it's not time consuming. You either live below your means, save for a few years, or find a partner. Once you have experience people are willing to lend you money for a 10% ROI after a 5 month flip or BRRRR deal. They're beating the stock market, you're getting equity or profit, and it's repeatable if you're motivated and the market is right.
That 90/7/3 breakdown is really interesting. On that first pass through the 90%, what are you actually looking at to eliminate a property quickly? And for the 7% that make it through, what information do you usually have to go find before you’re comfortable deciding whether it’s one of the 3%?
- 2moJaron WallingPro MemberRental Property Investor · Indianapolis, IN · Member since 2018 · 4k+ posts · 4k+ votes
Quote from @Nicholas Alexander Guerrero:
Quote from @Jaron Walling:
@Nicholas Alexander Guerrero From a SFR and BRRRR strategy investor's prospective the most time consuming part is finding a good deal. Without a good deal your target ARV (forced equity) or cash-flow goals are impossible to achieve. I'd say 90% of the houses on the MLS don't work, 7% warrant good analysis, and 3% are worth an offer when you're activity trying to buy property.
The second part is estimating your rehab. Once you have done 2-3 properties and hired the same crew that part gets easier and less time consuming. Our contractors actively tell me what's wrong with my rentals or SOW. There's surprises but you learn to tailor the deal (negotiate) and rehab (material or SOW) to met your goals.
Financing is probably the 3rd issue (maybe 1st if you're green and young), but it's not time consuming. You either live below your means, save for a few years, or find a partner. Once you have experience people are willing to lend you money for a 10% ROI after a 5 month flip or BRRRR deal. They're beating the stock market, you're getting equity or profit, and it's repeatable if you're motivated and the market is right.
That 90/7/3 breakdown is really interesting. On that first pass through the 90%, what are you actually looking at to eliminate a property quickly? And for the 7% that make it through, what information do you usually have to go find before you’re comfortable deciding whether it’s one of the 3%?
The first 90% is ruled out by location, the 7% would be the asking price vs. condition/strategy, and last 3% would be getting an offer accepted. We target distressed properties that warrant a lower offer. If you want to create equity (actual wealth/CF) you'll buy ugly houses too.
My life is extremely busy right now (new job, two small kids) so we're not making offers on houses. I don't do REI full time but I hope to in the future. I keep the same expectations regardless.
- 2moG. Brian DavisPro MemberInvestor · Hatboro, PA · Member since 2016 · 3k+ posts · 877 votes
The hardest part is usually not running the numbers, it’s figuring out which numbers I actually trust. Rents, repairs, insurance, taxes. Anyone of those can change the deal pretty quickly. When a property first catches my eye, I’m mostly trying to figure out whether the numbers are realistic enough to keep digging. If they are, I spend more time on it. If not, I move on.
- Austin, Travis County · Member since 2026 · 13 posts · 3 votes2mo
That distinction between running the numbers and trusting the numbers is exactly what I was trying to understand. When you’re validating rents, repairs, insurance and taxes, are you usually bouncing between different sources/people for each one? Or is the bigger problem finding the information, resolving conflicting information, or just knowing how much confidence to put in it?
- 2moJimmy LieuBusiness MemberReal Estate Agent · Columbus, OH · Member since 2019 · 3k+ posts · 2k+ votesGreat question, Nicholas! For me, rehab costs usually create the most uncertainty because ARV, rents, taxes, and financing can be estimated fairly quickly from available data, but the condition of a property can change the deal completely. When something first catches my attention, I do a quick pass on purchase price, realistic rent or ARV comps, taxes, insurance, financing, and a conservative rehab estimate. If it still looks good, then I spend more time on the condition, inspection, major mechanicals, sewer, foundation, roof, and getting actual contractor numbers. I’ve found it’s easy to spend hours analyzing a property that never had a chance of working, so I try to keep the first analysis simple and only dig deeper once it passes that initial screen. The biggest lesson for me has been separating the “quick screen” from the real due diligence instead of trying to perfectly analyze every property from the start. Happy to connect and answer any questions you have!
Quote from @Nicholas Alexander Guerrero:
For those actively buying or analyzing residential investment properties, what part of deciding whether a deal actually works takes you the most time or creates the most uncertainty?
Rehab costs? ARV? Rent assumptions? Financing? Due diligence? Keeping everything organized? Something else?
I’m especially curious what your process looks like when a property first catches your attention and you’re trying to decide whether it’s worth pursuing further.
Not looking for anyone to share proprietary spreadsheets or anything — mostly interested in how other investors approach the problem and where the process still feels unnecessarily difficult.
Jimmy Lieu, Red 1 Realty4.9121 Reviews- Austin, Travis County · Member since 2026 · 13 posts · 3 votes2mo
This is exactly the kind of workflow I was curious about — really appreciate the detail. I’ll shoot you a message.
- 2moAshish AcharyaBusiness MemberCPA, CFP®, PFS · FL · Member since 2017 · 5k+ posts · 3k+ votes
Nicholas, the part that usually takes the most work isn’t running the calculator. It’s figuring out which assumptions are actually trustworthy.
For me, rent, rehab, taxes, insurance, and deferred maintenance deserve the most scrutiny. I’d rather spend extra time validating those numbers than build a perfect spreadsheet around assumptions that are too optimistic.
When sources disagree, I usually underwrite to the more conservative number until I can verify it through leased comps, contractor bids, the county, an insurance quote, or a local property manager. I also like to run a downside case. If slightly lower rent, higher repairs, or a longer vacancy kills the deal, there probably isn’t enough margin.
The tax side belongs in that analysis too. If it’s a rental, I’d look at depreciation and whether cost segregation makes sense once the property is placed in service. Cost seg can accelerate depreciation, but the key question is whether the resulting losses are actually usable under the passive-loss rules.
The goal isn’t to eliminate every unknown. It’s to know which assumptions can hurt you the most if you’re wrong.
Happy to connect!
INVESTOR FRIENDLY CPA®4.9242 Reviews - 1moAdam TafelBusiness MemberReal Estate Agent · St. Paul, MN · Member since 2017 · 592 posts · 402 votes
The spread between potential purchase price and ARV is #1. Estimating renovations gets very easy, as does everything else you listed. It's all about finding a deal which a nice big spread.
Upside Property Sales 4.9108 Reviews
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