The Real Estate Professor — Free Tools
Deal Analyzer
Know your numbers before you pick up a hammer
Every bad flip I've ever been called in to rescue died the same way: the buyer fell in love with the after picture and guessed at the numbers in between. This analyzer runs the discipline in ten seconds — total money in, equity at the after-repair value, and the classic 70-percent-rule maximum offer that keeps a margin between you and the surprises.
The contractor's fine print
The number that lies most often is the repair budget — so protect it three ways. Get three bids per trade, every bidder pricing the same written scope sheet — same materials, same allowances — or you're comparing guesses, not bids. Hold a contingency on top of the budget, because dirt and demo always surprise you; reactive repairs cost two to three times what planned ones do. And check the tax records on any "finished" space you're paying for — if the finished basement isn't recorded as finished square feet, it was likely done without permits, and your appraisal will treat it accordingly.
The 70 percent rule — ARV times 0.70, minus repairs — isn't law; it's armor. In slow markets, tighten it. In hot markets, veterans shave it at their own risk. What it really enforces is a margin big enough to survive being wrong about something, because on a renovation, you will be wrong about something.