How to Analyze a Wholesale Deal in 5 Minutes

Time is money in wholesaling. If I can't run the numbers in under five minutes, I'm probably overthinking it.

You don't need complex spreadsheets to figure out if a property deserves your attention. With the right framework, you can confidently evaluate wholesale opportunities on the spot - whether you're standing in the property, sitting at your desk, or driving between appointments.

What You're Actually Looking For

Real estate wholesaling means finding discounted properties and selling the purchase contract to an end buyer for a fee. Your success depends entirely on finding properties with enough equity to accommodate both your assignment fee and your buyer's profit margin.

The golden rule: your end buyer must see clear profit potential after all costs. Most fix-and-flip investors I work with need at least 20-25% profit margin on their total investment.

The Four Numbers That Matter

You need to know ARV (After Repair Value), repair costs, Maximum Allowable Offer, and your assignment fee. That's it.

ARV represents what the property will be worth after all repairs are completed. This figure drives everything else. Your MAO tells you the absolute highest price you can pay while leaving room for your buyer's profit.

Here's what I actually do: after analyzing a few hundred properties, you'll start recognizing good deals instantly.

The 5-Minute Framework

This is the exact process I use whether I'm reviewing a direct mail lead, analyzing a property from a bird dog, or evaluating an MLS listing.

Minute 1: ARV Calculation

Pull up comparable sales on your phone using Zillow, Realtor.com, or MLS access. Look for three to five properties that sold within the last six months, located within a half-mile radius, with similar square footage and bedroom/bathroom count.

If I can't find three clean comps fast, I pass. No sense wasting time on a property I can't accurately value.

Let's say you're looking at 123 Main Street, a 1,500 square foot home. You find five comparable properties: one sold for $245,000, three sold between $265,000 and $275,000, and one sold for $295,000. Remove the outliers and average the middle three, giving you an ARV of about $270,000.

Minute 2: Repair Costs

I use a simple system: light rehab ($15-25 per square foot), medium rehab ($25-40 per square foot), and heavy rehab ($40-60+ per square foot).

Light rehabs need paint, flooring, landscaping, and minor cosmetic updates. Medium rehabs require kitchen and bathroom renovations, possible HVAC replacement, and more extensive work. Heavy rehabs involve structural issues, major system replacements, or complete gut jobs.

For our 1,500 square foot example, assume it needs a medium rehab. Using $30 per square foot, you calculate $45,000 in repairs. Always add a 10-15% contingency buffer. Add $6,750, bringing total estimated repairs to $52,000.

If the roof looks old, I pad repairs and keep moving.

Minute 3: Maximum Allowable Offer

Now you apply the formula: MAO = (ARV x 70%) - Repairs. The 70% rule provides cushion for your buyer's profit margin, holding costs, closing costs, and your assignment fee.

Using our example: ($270,000 x 0.70) - $52,000 = $189,000 - $52,000 = $137,000. This means $137,000 is the absolute maximum you should offer.

Some markets require adjusting the percentage. Hot markets with high demand might use 75%, while competitive markets might require 65% or lower. Know your buyers.

Minute 4: Your Assignment Fee and Buyer's Profit

Subtract your desired assignment fee from the MAO to determine what you can actually offer the seller. I typically target $5,000 to $15,000 depending on the deal quality and market.

For this example, let's target $10,000. Subtract from your MAO: $137,000 - $10,000 = $127,000. This is your actual offer to the seller.

Your buyer will pay: $127,000 (purchase) + $52,000 (repairs) + $10,000 (your fee) + $8,000 (holding/closing costs) = $197,000 total investment. With an ARV of $270,000, they'll make about $73,000 profit. That's a 27% return - well above the minimum most investors require.

Minute 5: Final Checks

Ask yourself: Does this deal meet my buyer's criteria? Can I realistically get the property under contract at or below my target price? Are there any red flags I'm missing?

If everything checks out, you've got a qualified lead worth pursuing. If the numbers are close but not quite there, determine if you can negotiate a lower purchase price. If the numbers don't work, move on immediately.

I'd rather miss a deal than burn a buyer with bad numbers.

Common Mistakes That'll Kill Your Reputation

Overestimating ARV

Never use active listings as comps. Only use actual sold properties. Listings represent asking prices, not market value.

Another mistake involves using comps from different neighborhoods or property styles. A renovated Victorian doesn't compare to a ranch, even if they're the same square footage. Location differences of just a few blocks can create value variations of 20-30%.

If comps are messy, I pass.

Underestimating Repairs

Contractors consistently identify issues that photos and drive-bys miss. Your $30,000 repair estimate becomes $50,000 when they find roof damage, outdated electrical, or hidden water damage.

Beginners often forget permits, dumpster fees, utility connections during renovation, and landscaping. A proper rehab budget includes all costs to bring the property to retail condition.

Ignoring Your Buyer's Criteria

A deal that works on paper fails if none of your buyers want it. Some investors refuse properties built before 1950, won't touch properties needing foundation work, or only buy in specific school districts.

Build a detailed buyer's list that documents each investor's preferences, capital availability, and profit requirements. Reference this during your five-minute analysis.

Tools That Speed Up Analysis

Download property analysis apps to your smartphone. Many successful wholesalers create custom Excel or Google Sheets templates with their MAO formulas pre-built.

Develop relationships with real estate agents willing to pull MLS comps quickly, or invest in MLS access if available in your market. Public records websites, Zillow, Realtor.com, and Redfin provide free comparable data, though MLS data is always more accurate.

FlipMantis and similar deal management platforms help you track analyzed deals, store property information, and manage your pipeline efficiently. These systems prevent you from re-analyzing the same property multiple times.

Real-World Example

You receive a call at 2 PM from a motivated seller at 456 Oak Avenue. She inherited the property and wants to sell quickly. While still on the phone, you begin your analysis.

Minute 1: She describes a 1,800 square foot, four-bedroom, two-bathroom home built in 1985. You pull up Zillow and find recent comps: $310,000, $325,000, $328,000, $315,000, and $340,000. Removing extremes and averaging gives an ARV of about $323,000.

Minute 2: She mentions the property needs new flooring, paint, kitchen updates, and bathroom renovations. Classic medium rehab. At 1,800 square feet and $30 per square foot, you estimate $54,000 in repairs, plus 15% contingency equals $62,000 total.

Minute 3: Calculate MAO: ($323,000 x 0.70) - $62,000 = $164,100 maximum allowable offer.

Minute 4: Subtract your $10,000 assignment fee: $154,100. Verify buyer profit: purchase ($154,100) + repairs ($62,000) + assignment fee ($10,000) + holding costs ($10,000) = $236,100 total investment. Buyer profit: $86,900, representing a 27% return. That's a solid deal.

Minute 5: Quick validation: You have three active investors who buy in this neighborhood. The numbers work at your target fee. No obvious red flags mentioned. You tell the seller you'd like to see the property and discuss an offer around $150,000, giving yourself negotiation room.

Build Speed Through Practice

Your first attempts at five-minute analysis will likely take fifteen or twenty minutes. Speed comes through repetition. Commit to analyzing five properties daily, even if you're not actively pursuing deals.

Keep a spreadsheet tracking your initial analysis against actual results when deals close. Compare your ARV estimates to actual sale prices and your repair estimates to final contractor invoices.

If your ARV estimates consistently run 10% high, adjust your process to be more conservative. If you're underestimating repairs by 20%, study more contractor estimates and learn what you're missing.

I track every estimate I make. You get better fast when you see where you're off.

Start Practicing Today

The five-minute analysis framework isn't about rushing. It's about eliminating wasted time on properties that'll never work while quickly identifying the deals worth pursuing.

Speed without accuracy is worthless. You're not trying to perfectly predict every dollar. You're creating a conservative estimate that protects both your reputation and your buyer's investment.

If you consistently deliver deals that meet or exceed your analysis, buyers will trust you and close quickly. That trust is what builds a sustainable wholesale business.

Pull up ten random properties in your target market and run them through this framework. Time yourself. Track your results. Within a week, you'll be analyzing deals faster than you thought possible.

Ready to manage your deal pipeline like a pro? FlipMantis helps you track analyzed deals, store property information, and manage your entire wholesale operation efficiently. Stop losing track of opportunities and start closing more deals.

FAQ

Is wholesale real estate legal?

Yes, wholesaling is completely legal when done properly. You're simply assigning your rights to purchase a property to another buyer. The key is transparency - never misrepresent yourself, and always ensure you have proper contracts in place. Some states require specific disclosures, so check your local regulations.

Can you wholesale with no money or credit?

Yes. That's the beauty of wholesaling. You don't need your own money or credit to get started. You're not buying the property yourself - you're getting it under contract and finding a cash buyer who will close on it.

What is the 70% rule in wholesaling?

Your end buyer should pay no more than 70% of the after repair value minus repair costs. This formula accounts for their profit margin (typically 20-25%), closing costs, holding costs, and your assignment fee. Some markets require adjusting the percentage based on local investor expectations.

How do I calculate a wholesale deal?

Start with ARV, subtract repair costs at 70%, then subtract your assignment fee. That gives you your maximum offer to the seller. This simple formula is the foundation of every successful wholesale deal.

Is learning deal analysis important for wholesaling?

It's not just important - it's THE necessary skill. You can't succeed as a wholesaler without being able to quickly and accurately analyze whether a property will work for your buyers. This skill separates people who actually close deals from those who just waste everyone's time.