Deal Analysis & Offer Math: Know Your Number

Deal analysis is the process of determining the most you can pay for a property and still hit your profit target. It combines comps and ARV, a repair estimate, and an offer formula like the 70% rule or a full MAO. The result is your maximum offer — the number every acquisition decision and LOI is built on.

The 70% rule says pay no more than 70% of after-repair value minus repairs: (ARV × 0.70) − repairs = maximum offer. The 30% you hold back covers profit, holding costs, closing costs, and resale commissions on a flip. It's a fast screen you adjust to your market — tighter when slow, looser when hot.

Pull three to five recently sold, renovated homes within half a mile that match the subject in size and style. Adjust their prices for differences, derive a price per square foot, and multiply by the subject's square footage. Use sold comps only — never active listings — and lean conservative when they disagree.

The 70% rule bundles all your costs into one flat percentage; MAO itemizes them — ARV minus repairs, holding, closing, profit, and any assignment fee. The rule is faster for screening; MAO is more accurate for the final go/no-go, especially when a deal's real costs differ from the market average.

Two ways: a fast per-square-foot tier (cosmetic, moderate, full gut) to screen, and a detailed line-item estimate by component before you commit. Inspect the expensive systems — roof, HVAC, foundation — first, build rates from your own local jobs, and always add a 10–20% contingency for the unknowns.

Flip math evaluates resale price; rental math evaluates income. Rentals turn on NOI, cap rate, and cash-on-cash return, screened by the 1% rule — and they live or die on the expenses beginners skip, like vacancy, maintenance, capital reserves, and management. A great flip can be a terrible rental and vice versa.

Encode your offer math as a buy box, then send. BILT CRM comps listed properties against your formula, generates an LOI at your number, and blasts it to the listing agent at scale. The analysis produces the number; BILT turns the number into offers in the market instead of spreadsheets on your desktop.