FlipScore

How to Analyze a Wholesale Real Estate Deal

Analyzing a wholesale deal isn't guesswork — it's a repeatable process. Here's exactly how experienced wholesalers evaluate a deal in under an hour.

The 5-Step Deal Analysis Framework

1. Determine ARV — pull comps and find the after-repair value
2. Estimate Rehab — scope the repairs needed
3. Calculate MAO — find the max you can pay the seller
4. Set your assignment fee — decide what you need to make
5. Gut-check the deal — will a cash buyer actually close on this?

Let's walk through each step with a real example.

Step 1: Determine ARV

ARV (After Repair Value) is what the property will be worth fully renovated. You find it by pulling comparable sales (comps) — recently sold homes nearby that are similar in size, bed/bath count, and condition.

Rules for good comps:

• Sold within the last 6–12 months
• Within 0.5–1 mile radius
• Same property type (SFR to SFR)
• Within 20% of your property's square footage
• Updated/renovated condition (not distressed)

Average 3–5 comps. That average is your ARV.

Step 2: Estimate Rehab Costs

You don't need to be a contractor to estimate rehab — you need to know what level of work the property needs:

When in doubt, be conservative — add 10–20% to your initial estimate. Surprises always cost more, not less.

Step 3: Calculate MAO

MAO (Maximum Allowable Offer) is the highest price you can pay the seller and still make the deal work for your end buyer.

Using our example:

You should not pay more than ~$53,000 for this property.

Step 4: Set Your Assignment Fee

Your assignment fee is baked into the MAO calculation above. If you want a $10,000 fee, the math already accounts for it. But you need to decide this before negotiating:

• Thin markets: $3,000–$7,000 fee
• Average deal: $8,000–$15,000 fee
• Strong deal: $15,000–$30,000+ fee

The assign price (what you charge your end buyer) = your locked-in contract price + your fee. If your MAO is $53k and you want $10k, your assign price is $63k.

Step 5: Gut-Check the Deal

Before locking anything under contract, ask yourself:

• Would I buy this if I were an investor? If not, your buyers won't either.
• Is there a cash buyer market here? Rural properties with no investor activity are hard to move.
• Are my comps solid? If you're stretching the ARV, the deal gets worse — not better.
• Is the seller motivated enough to accept your price? If they want $80k and your MAO is $53k, it's a dead deal. Move on.

When to Walk Away

Not every deal is a deal. Walk away when:

• Seller's price is more than 10–15% above your MAO with no room to negotiate
• ARV confidence is low (thin comp market, unusual property)
• Rehab is a gut and your ARV only supports a light renovation deal
• There are title issues, liens, or legal complications you can't verify
• You feel pressure to "make the numbers work" by inflating ARV

The best wholesalers pass on bad deals quickly. Speed of decision is everything — you make money by moving on fast and doing volume.

The Full Deal at a Glance

Analyze Deals in 60 Seconds

Doing this manually takes 30–60 minutes per deal. FlipScore pulls comps, estimates rehab, calculates MAO, and gives you an AI deal score — all from a single address.

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