How to Analyze Real Estate Deals Like a Pro (ARV, Comps & Repair Formula)

To analyze a real estate deal, start by calculating the ARV using tight, renovated comps. Subtract realistic repair costs, apply a local investor multiplier (often around 70%), and compare that number to your contract price. If the numbers work, the deal works.

How Do You Know If a Real Estate Deal Is Good?

A good real estate deal is one that’s priced low enough to leave room for repairs, holding costs, and investor profit. Everything starts with the numbers, not the story. A good real estate deal starts with the numbers. It's not just about getting a low price, it’s about understanding value.

A strong deal benefits everyone involved: the seller gets a fair, data-backed offer, the investor earns enough spread to profit, and the wholesale real estate investor makes a fee without overpromising.

Why Price Is the Ultimate Factor

Even if a property is handed to you for free, it may not be a good deal if it can't be sold to an investor. Structural issues, bad locations, or market mismatch can make properties unappealing. The price under contract must reflect a realistic return for everyone involved.

What Is the Main Goal When Analyzing Real Estate Deals?

The goal of real estate deal analysis is to determine what a property is worth after repairs (ARV), subtract realistic rehab costs, and calculate the maximum price an investor would pay today.

The core goal is to determine the ARV (After Repair Value), analyze realistic repair costs, and calculate the maximum price an investor would pay today. This process is called underwriting, and it creates a reliable Comparative Market Analysis (CMA).

In this episode of the DealMachine Real Estate Investing Podcast, Jimmy Quigg breaks down how to properly analyze deals, from ARV to repair estimates, with real-world examples and strategies. Want to hear the full interview? Watch the full episode below:

How Do You Analyze a Real Estate Deal Step-by-Step?

Real estate deal analysis follows a repeatable framework. When you use the same steps on every deal, your pricing becomes more accurate and easier to defend to investors.

Follow this structured, repeatable process to increase your deal accuracy and consistency:

Step 1: Pull the Tax Records First

Tax records confirm ownership, square footage, lot size, bed/bath count, and permit history. Always start here. They provide the foundation for your analysis and help you catch unpermitted additions or incorrect listings.

Step 2: Identify Distress: Property or Situation?

Not all distressed properties look broken. Some are just outdated. Others are owned by out-of-state heirs, recent divorcees, or sellers in pre-foreclosure. Look for both physical and situational distress to spot the best opportunities.

Step 3: Confirm the Property’s Condition

Photos may be enough if detailed, but many deals require a walkthrough. Some investors close sight unseen, but never rely solely on photos when:

• Angles hide parts of the room
• Systems like HVAC, roof, or plumbing are out of frame
• The layout feels off

Walkthroughs help identify red flags and ensure your rehab estimate reflects reality.

Step 4: Map Comparable Sales (Comps)

Use tools like DealMachine or MLS to draw a tight map around the subject property. Avoid cherry-picking comps just to support a higher ARV. The closer and more similar the comps are, the stronger your analysis.

Key Comp Filters:

• Year Built: Stay within ±10 years
• Square Footage: ±15% range
• Bed/Bath Count: Must match
• Subdivision: Same or adjacent (if similar)

If your property was built in 1985, don’t use a 1999 comp, even if it “looks similar.”

Step 5: Define After-Repair Value (ARV)

ARV is calculated by finding the average price-per-square-foot of 2–3 recently sold, fully renovated comps. Multiply that average by the subject property’s square footage to get your ARV.

Formula: ARV = (Average PPSF of Comps) × (Subject Property Square Footage)

Only use rehabbed comps, dated or as-is sales distort your ARV.

Step 6: Estimate the Repair Costs Accurately

Your repair estimate must align with what your comps show. Don’t budget high-end marble countertops if the comps used laminate. Use:

• Walkthrough data
• Contractor quotes
• Cost-per-square-foot calculators

Include big-ticket items like roof, HVAC, electrical, plumbing, and layout changes.

Step 7: Calculate the Investor’s Target Price

Use the ARV, subtract repairs, and apply a local market discount (called the multiplier) to determine what an investor would pay today.

Target Price Formula: Target Price = (ARV × Market Percentage) − Repairs

Example:

• ARV: $300,000
• Market Multiplier: 70%
• Repairs: $50,000
• Target Price = ($300K × 0.70) − $50K = $160,000

This is your investor resale price. Offer below it to build in your wholesale fee.

Step 8: Know the Multiplier for Your Market

The 70% rule is a starting point, not a rule. Market multipliers vary:

• 65% for heavy rehab or high-risk zip codes
• 70% for average flips
• 75–80% for light cosmetic work or fast-selling areas

Adjust your multiplier based on:

• Rehab size
• Area demand
• Investor appetite
• School zones
• Local regulations

How Tight Should Real Estate Comps Be?

The best real estate comps are as close and similar to the subject property as possible. Tighter comps lead to a more accurate ARV and fewer pricing mistakes. The tighter, the better. Keep comps within the same neighborhood, square footage range, and construction era.

What Makes a Comp Truly Comparable?

A valid comp:

• Sold in the last 6 months
• Renovated to a similar finish level
• Matches bed/bath count
• Has a similar floor plan

How Far Back Should You Go When Pulling Comps?

Aim for comps within the last 3–6 months. Avoid using outdated sales unless the market is slow.

How Do You Use Local Market Knowledge to Adjust Offers?

Local market knowledge helps you fine-tune your ARV and multiplier based on what investors are actually paying right now, not outdated rules of thumb. Local investor feedback is essential. It tells you:

• What buyers are paying in specific areas
• What types of projects are selling now
• Which neighborhoods need deeper discounts

Talk to:

• Investors closing deals today
• Agents who list investment properties
• Contractors with experience in your market

Where Can You Find the Best Real Estate Deals?

Distressed properties come from:

• Driving for Dollars
• Bandit signs
• Digital marketing
• Wholesaler lists

The key isn’t finding leads. It’s knowing how to filter the right ones and analyze them properly.

Tools That Help You Analyze Deals Faster

A platform like DealMachine helps you:

• Pull comps
• Draw comp maps
• View property details
• Organize lead lists

Use tools for speed, but verify everything manually.

FAQs

What is the best way to analyze a real estate deal?

Start by estimating ARV using tight comps. Subtract realistic repairs, apply a local multiplier, and calculate the investor’s max offer.

How do I find the ARV of a property?

Find 2–3 renovated comps nearby. Calculate the average price per square foot and multiply it by your subject property’s square footage.

What does the 70% rule mean in real estate?

It’s a guideline: Investors typically pay 70% of ARV minus repairs. However, this percentage varies based on local market trends and project risk.

How accurate do my comps need to be?

Extremely accurate. Use similar homes in the same area, with matching features and recent sales dates to ensure a solid ARV.

Can I analyze a deal without walking the property?

Only if photos are detailed, recent, and show all major systems. In-person walkthroughs are recommended for accurate repair estimates.

Final Thoughts

Analyzing real estate deals is both an art and a science. Use tight comps, realistic repairs, and the right multiplier to price deals fairly and profitably. This process builds trust with investors and consistency in your pipeline.