How to quickly analyze a property quickly

Question

Hello!,How to analyze a property quickly

SampleUseCase:House sells for $300,000 fixed up. Repair budget is around $60,000.$300,000 x 0.75  = $225,0000.75 factor to account for profit, closing costs on both ends, agent fees when I sell, and the months I hold the property while it is being worked on. Should I use different factors for different year built houses? Any online free tool I can use for this analysis before sending a contractor (by paying 500$) to get rehab estimates if numbers seem okay?$225,000 - $60,000 = $165,000I can offer 165k?But one house was built in 1910 and another house was built in 2010 ( everything else is the same, for example both houses sell at 300k and both houses need 60k rehab budget).  How to account for that?  How much can I offer for a 1910 property?How much can I offer for a 2010 property?Thanks

Alex S. · Answer

For a first pass on a flip at $300k ARV, the 70% rule gets you close: max offer = 0.70 x ARV - rehab, so $210,000 minus your repair estimate. If you're holding it as a rental instead, the fastest screen is the 1% rule on rent vs purchase price, then run actual cash-on-cash (annual cash flow / cash invested) on anything that passes. The number that kills most deals is the rehab estimate, so get that tight before you trust either one.

Caleb Brown · Answer

ARV I would look at comps. You would factor age, SQ FT, beds, baths, etc. Rehab I would have an itemized scope of work form GC(s). You may have to pay upfront for that. There is no quick way to analyze. You want to do initial analysis then view and dive deeper. As you look at more you'll be quicker.

Gp G. · Answer

Does AI help in this regard. How to accurately estimate ARV and Rehab costs which are big variable challenges figures here

Diana Khan · Answer

I would not change the 75% rule just because one house was built in 1910 and another in 2010. In my experience @Gp G., the bigger question is what has actually been updated. An older house with newer plumbing, electrical, roof, HVAC, and windows can be less risky than a newer house that has been neglected.

For a quick first pass, I would use recent nearby sold comps for the ARV, then give yourself a rough repair range for the big items you can usually spot early, like roof, HVAC, plumbing, electrical, foundation, windows, and major cosmetic work. AI can help organize comps and build a checklist, but I would not let it decide the final ARV or rehab number. If the deal still looks good after that first screen, then it is worth spending the money on a contractor to tighten up the estimate. I like these kinds of deal-analysis questions because the goal is really to know which properties deserve a deeper look before you spend more time and money on them.

Paul Olusola · Answer

AI can definitely help with the first-pass analysis, but I wouldn’t trust it to replace an inspection or contractor estimate.

The useful part is speeding up the research before you spend money on a detailed rehab quote.

For example, a system could pull recent comparable sales, flag differences in square footage, age, beds/baths and location, then help estimate an ARV range instead of one random number.

For rehab, the year built could be used as a risk flag rather than just changing the formula. A 1910 house may need deeper checks on things like foundation, electrical, plumbing or old materials that a 2010 house may not.

The goal isn’t for AI to tell you exactly what to offer. It’s to quickly tell you whether a deal is worth investigating further before paying for inspections and contractor estimates

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I’d be curious if anyone here is already using AI or automated tools for the first-pass underwriting.

Matthew Irish-Jones · Answer

Not a great industry to analyze quickly when there are hundreds of thousands of dollars involved.

There are going to massive differences between houses built 100 years apart.  There are no short cuts or algorithms to give you the answer.

You need to know the condition of the structure, foundation, and how updated each mechanical system is.

How to quickly analyze a property quickly

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