How to Analyze a Fix and Flip Deal (Step by Step)
To analyze a fix and flip deal, you need five numbers that fit together: what you will pay, what the finished house should sell for (ARV), what the rehab will cost, what you will spend while you own it, and what it costs to buy and sell. The rest of this guide walks that process in order so you can drop weak deals fast and only spend money on survivors.
This is a buyer-intent how-to for the analysis workflow. It is not the same as our flip profit formula article (purchase, rehab, holding, buying/selling and financing line by line) or our separate guides on calculating ARV, the 70% rule and rehab cost per square foot — those go deeper on each piece. Hypothetical numbers below are labeled illustrations, not Cleveland market rates.
By the ACC Solutions team.
Step 1: Lock the Purchase Number You Are Testing
Start with the number you might actually pay: list price, a planned offer, or an assignment price if you are wholesaling. Write it down separately from ARV. Mixing ask and ARV is how optimistic spreads appear on paper.
If the seller will not move, your analysis still has to work at their number — or you pass.
Step 2: Estimate ARV from Sold Comps
ARV is after-repair value from recent sold comps that match beds, baths, living area, location and the finish level you plan to exit with. Active listings are competition, not comps. Adjust for differences instead of forcing a stretch match. Our ARV guide covers the method.
In Cuyahoga County, cross-check basic property facts on MyPlace and through the Fiscal Officer before you treat a data scrape as final.
Step 3: Build a Rehab Budget for the Exit Finish
Scope the rehab to the buyers you expect at your ARV, not to a national average. Split costs that scale with square footage (paint, flooring) from per-item costs (kitchen, bath, roof, furnace). Be honest about light vs medium vs heavy — calling a medium job "light" is the fastest way to erase profit. Details: how to estimate rehab costs per square foot.
For Cleveland work, remember permits and lead-safe rules on many pre-1978 homes can add cost and calendar time (City of Cleveland rehab permits; EPA RRP Rule). Our scope of work guide helps you write a bid-ready scope once a deal clears the screen.
Step 4: Run a Quick Offer Screen (Optional 70% Rule)
Many flippers use the 70% rule as a first filter: maximum allowable offer ≈ ARV × 0.70 − repairs. It is a rule of thumb, not a guarantee and not advice. See the 70% rule explained. Deals that fail hard on this test rarely get better after you add holding and selling costs.
Step 5: Add Holding, Buying, Selling and Financing Costs
This is where "good on paper" flips die. Add:
Holding: taxes, insurance, utilities, loan payments, lawn/snow for every month you expect to own it — then add contingency months.
Buying costs: title, escrow, inspections, lender fees.
Selling costs: commissions, seller concessions, staging, closing costs.
Financing: points, interest and any hard-money or private-loan fees if you are not paying cash.
Plug the full stack into a profit worksheet or our free fix and flip profit calculator (runs in your browser, no sign-up).
A Worked Example (Hypothetical Numbers Only)
Every dollar figure below is made up for illustration. These are not Cleveland market rates, not app results and not a promise of profit.
Ask / test offer: $120,000 (hypothetical)
ARV from comps: $210,000 (hypothetical)
Rehab budget with contingency: $45,000 (hypothetical)
Buying + selling costs: $18,000 (hypothetical)
Holding + financing over 5 months: $12,000 (hypothetical)
Total cost basis: $120,000 + $45,000 + $18,000 + $12,000 = $195,000
Projected profit before tax: $210,000 − $195,000 = $15,000 (hypothetical)
On this illustration, a $15,000 spread on a $210,000 ARV is thin once surprises hit. A higher rehab, a slower sale or a lower ARV would wipe it out. That is why the first pass exists — to decide whether this address earns a walkthrough at all.
Quick 70% check on the same made-up numbers: ARV × 0.70 − rehab = $210,000 × 0.70 − $45,000 = $102,000 MAO rule-of-thumb. The $120,000 test offer sits above that line, which is another reason to pass or renegotiate before spending on bids.
Step 6: Stress-Test Before You Offer
ARV −5%: Does profit survive?
Rehab +15%: Still acceptable?
Hold +2 months: Still acceptable?
Exit plan B: If retail sale stalls, can you rent or wholesale, and do those numbers work? (Rental cash-flow analysis is not listed inside the A.I. Deal Assistant on our sales page; use the free rental cash flow calculator for a quick rent screen.)
If the deal only works with perfect assumptions, it probably does not work.
Step 7: Replace Estimates with Proof
Walk the property (or send a trusted local).
Write one scope and get at least two bids on that same scope.
Re-run profit with real bids and a realistic hold.
Only then write the offer.
Buying in Cleveland from out of town? See how to buy a Cleveland rental from out of state and rehab project coordination for local execution after the numbers clear.
Common Analysis Mistakes
Using list price as ARV.
Under-scoping rehab to force the deal to work.
Ignoring holding and selling costs.
Skipping lead-safe and permit time on older Cleveland houses.
Ordering bids before the first-pass math clears.
Speed up the first pass with the A.I. Deal Assistant
The A.I. Deal Assistant from ACC Software lets you paste an address or a Zillow or listing link and get ARV from recent comps, a rehab estimate, projected flip profit and a property snapshot. It works on desktop and mobile. Treat the output as a fast screen — results are estimates, not appraisals or inspections.
Free tier: 10 searches with 72-hour access. Investor Pro - Solo: $47/month for 3,000 searches, automatic updates and batch search support. 100+ active real estate investors use it.
Pro is $47/mo, cancel anytime.
See Investor Pro pricing (primary next step)
Questions? Email support@accmgmtsolutions.com or call (216) 238-5999.
Frequently Asked Questions
How do you analyze a fix and flip deal step by step?
Confirm the asking or offer price, estimate ARV from recent sold comps, build a rehab budget for the exit finish, add holding, buying, selling and financing costs, then compare projected profit and risk before you offer. Use the first pass to decide which deals earn a walkthrough and real bids.
What is the difference between ARV and list price?
List price is what the seller is asking. ARV (after repair value) is what similar renovated homes have recently sold for. A deal analysis uses ARV from comps, not the list price, when judging resale.
Should I use the 70% rule on every flip?
The 70% rule (MAO = ARV × 0.70 − repairs) is a common screening rule of thumb, not a guarantee and not advice. Many investors use it to drop obvious non-starters, then underwrite survivors with full holding, selling and financing costs.
Can software replace a walkthrough and bids?
No. An analyzer like the A.I. Deal Assistant gives fast estimates — ARV from recent comps, a rehab estimate and projected flip profit — to help you screen deals. Confirm any deal you pursue with comps you check yourself, a walkthrough and contractor bids. Results are not appraisals or inspections.
Where do I try the A.I. Deal Assistant?
See live pricing at https://app.accmgmtsolutions.com/pricing. The free tier is 10 searches with 72-hour access. Investor Pro - Solo is $47/month for 3,000 searches.
