Before You Make an Offer This Week, Stress-Test These 5 Numbers

Rehabbing & House Flipping
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Before You Make an Offer This Week, Stress-Test These 5 Numbers

Raymond Duplessis
Lender · Princeton, NJ · Member since 2026 · 24 posts · 7 votes

Happy Monday, BP community.

For anyone analyzing a fix-and-flip this week, here are five numbers I’d want to pressure-test before submitting an offer:

  1. Purchase price: Are you buying at a real discount, or does the deal only work if everything goes perfectly?
  2. Rehab budget: Does it include permits, contingency, and the items that typically appear after demolition?
  3. ARV: Is it supported by recent, genuinely comparable renovated sales and not just the highest sale in the neighborhood?
  4. Project timeline: What happens to the profit if the project takes three months longer than expected?
  5. Exit strategy: If the property doesn’t sell at the expected price, could you refinance and hold it, reduce the price, or bring additional cash to closing?

A deal can qualify for financing and still be a weak investment. The loan amount is important, but the project needs enough room for carrying costs, surprises, and a less-than-perfect exit.

If anyone is analyzing a deal this week, feel free to post the basics below:

  • Purchase price
  • Rehab budget
  • Expected ARV
  • Property location
  • Experience level
  • Planned exit

I’ll respond with the first questions I’d ask to help pressure-test the deal before it reaches underwriting. I’m also interested in hearing from experienced flippers: which of these numbers has caused the most trouble on your projects?

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  • Andy SabischPro Member
    Investor · Jackson, MS · Member since 2021 · 657 posts · 559 votes
    1mo

    As you said, a deal that only works if all the assumptions hold true is not a deal. People that fail to put at least a 10% to 15% contingency in the numbers, fail to be conservative on the ARV, fail to assume there will be delays and hence cost over runs will always be sweating when it comes to exit time. Posts here asking for help to get out of a deal that is draining their accounts are not that uncommon. Hope for the best but plan for the worst is the only way to go into deals especially as the market shifts especially if it does in the middle of your project.

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  • Yi Xu
    Flipper/Rehabber · Tacoma, WA · Member since 2026 · 10 posts · 2 votes
    1mo

    ARV has caused me the most trouble — but not the part people argue about (which comps to pick). It's the number underneath it: square footage.

    A couple weeks ago I was underwriting a flip candidate here in Tacoma. The MLS said 3,367 sqft, list price $404k — about $120/sqft, which looked cheap for the neighborhood. Pierce County assessor records said 2,483 sqft finished plus an 884 sqft unfinished basement. 2,483 + 884 = 3,367: the listing had rolled the basement into living space. Real number: $163/sqft. Every $/sqft comparison downstream of that was garbage, and the "deal" at asking price came out to roughly minus $40k after financing, holding, and selling costs.

    Two habits came out of that house. First, I run the math backwards before negotiating, so I walk in with three prices instead of one opinion: break-even ($366k on that house), and the price that clears my minimum acceptable profit ($318k — 21% below ask). If the seller can't get anywhere near the second number, it isn't a deal that got away, it's a retail listing wearing a flip costume.

    Second, your #4 (timeline) deserves to be a grid, not a line item. I hold the purchase price and move ARV ±$25k and rehab from $90k to $140k — nine cells. On that Tacoma house, eight of nine lost money; the one winner made $3,600 for five months of work. When most of the grid is red, the house isn't the problem — the price is.

    Since you're on the lending side: how often do you catch a sqft or comp problem in underwriting that the borrower's own numbers missed? Curious whether that's rare or routine from where you sit.

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