KGCI: Real Estate on Air - How to Analyze a Flip Deal: The Key to Profitability

Episode Date: August 18, 2025

Summary This episode provides a foundational guide for anyone looking to enter the world of house flipping. The discussion breaks down the critical steps to accurately analyze a potential deal, from estimating repair costs to determining the After Repair Value (ARV). It teaches listeners how to use a systematic approach and key formulas to avoid common mistakes and ensure a profitable outcome on every flip.Key TakeawaysMaster the 70% Rule: Learn this foundational formula for calculating your Maximum Allowable Offer (MAO). The rule helps you ensure that your purchase price and rehab costs are low enough to leave you a healthy profit margin.Estimate Rehab Costs Accurately: Discover how to create a detailed, itemized budget for renovations, including a crucial contingency fund for unexpected expenses. Accurate cost estimation is the single most important factor in a successful flip.Determine Your After Repair Value (ARV): Understand how to research and use comparable sales (comps) to accurately estimate the future value of the property once all repairs and upgrades are completed.Account for All Holding Costs and Fees: Go beyond the purchase price and rehab costs. Learn to factor in all potential expenses, including property taxes, insurance, utilities, loan interest, and closing costs, which can significantly impact your bottom line.Topics:Real estate flippingDeal analysisHouse flip numbersAfter Repair Value (ARV)Rehab costsCall-to-Action Listen to the full episode on your favorite podcast platform and start analyzing your deals with confidence!

You're listening to the Investor Agent Nation podcast, empowering agents and investors to collaborate effectively and grow their businesses symbiotically. Your host, Randy Zimnock and Eric Gross, share real-life case studies, trending tactics, and expert strategies that have helped them to accomplish over $1 billion in sales volume. Whether you're a seasoned agent looking to expand your business or an investor seeking to optimize your returns, you're in the right place. This is the Investor Agent Nation podcast. Today's topic is how to analyze a deal, a flip deal accurately, right? And this one is actually going to be one that he was going after with his investors here in Florida and Landa Lakes, to be exact. So that's kind of cool. But from what I understand, they were a little late to the party.

But either way, we're going to use it as a case study to be exact. kind of show you, you know, a tool that I've been using, gosh, from the beginning, dating back to 2010 when we developed this deal analyzer. And it's been, I mean, so valuable. Like, I can't even put a price that. I don't know what I would, I would pay a lot of money for this, for this deal. Because it saved me a ton of time. It's very easy to have interns. We had three. We had three, three interns locking up deals for us in San Diego back in 2010, 11, 12, 13 in those years. And they were just plugging in numbers into the deal analyzer to spit out what

we are able to offer on the property. It was that simple. So, but first we need to understand how to use it. We need to understand the market, which we're not going to go into, you know, how we're going to comp the property today. That's not the, the, the point of today's training. It's understanding, okay. If we know the ARV, if we know the numbers, the big three, you know, what's the after repair value?

What is the rehab number? How much are we willing to offer? Right. And is that going to be accurate, you know, in terms of the profit that we're looking to make, right? So that's the fun part. And we're going to make some tweaks to the deal analyzer that can literally double triple your returns when you were not even expecting it. So I'll show you that a little bit later. Eric, I know you shared some links.

So before we, you share your screen, if any of you are not part of the Facebook group, he shared a link there. So feel free to join the group. That's where we're going to post the recordings of this, make any other future announcements. And then also he shared our YouTube channel, which you could also find the recordings there. So if you could subscribe to that and give us a thumbs up there, that would be awesome. So Eric, share. I'm going to let you share your screen.

Take it away for now. Awesome. Let me get this top one. It's kind of, okay, cool. It did not repeat me, which is always good. Man, the thing drives new nuts. Okay. So this one, I'll kind of start how I found the deal and then how I kind of got it running.

So Landau Lakes is just, that's actually where we live. It's a little bit outside of Tampa. It's about 20 minutes north. This property was built in 1960. I have the Zillow link and then I also have our MLS link pulled up. But this actually came through my MLS on one of my investor setups. So this one, care and care is weirdly one of the ones that we have that is our trigger words. It's a common word that tends to be used when a work house needs at home, whether it says like a.

You mean to be clear, you have filter set up with keywords. And one of those keywords is care. Yeah. And then you got an email because of that keyword with this listing. Notifications. Yep. Yep. So got it in kind of knowing Lando Lakes knew what to expect with this one.

So I had a good feeling. So it's pending right now. But 350 is a really good price over here, especially when I started to dig into it. It's sitting on a freshwater little lake area. and that little lake is, I mean, it's a small lake. It's nothing major, but it's very good for like water activities. Anytime you have a waterfront property, people tend to love it.

So the more that I kind of looked into this, and I'll go, it was actually a little bit similar than our MLS in terms of look. So right here, I could kind of tell based off where the house was situated, we were like right in this back area, got a nice little lake area. And this is somewhere people typically want to be just based off of schools, the size of the home and the lot. We're also interesting. A lot of lots, I mean,

23 acres of everywhere else is not very large, but in Florida, that's a good lot size. So found this, three bed, three bath, 1,900 square feet, ran comps on it. And conservatively, like not going crazy on the rehab, not doing anything too crazy, I had our comps at 500. I had a pretty good feeling on this one that if we listed the property, I'd be able to get probably closer to around 52530. But when I'm analyzing it for investor, I almost wanted to be a worst case scenario. I actually did run this back about a month, month and a half ago.

It's been a while. So our market was still kind of slow then. And I wanted to assume longer days on market, not getting the highest price that I could possibly get for the property. So 500 ARV is kind of where I started. We'll do the deal analyzer with Randy here shortly. But typically off the top of my head, I'm always. going to run it 70% minus rehab is going to be what we can offer on a property so 70% of 500 is going to put me at 350 so it's going to put me directly at this number and then what I'm going to

want to do is typically go behind that I'm going to want to pretty much start how much are the rehabs going to be like so realistically what I'm going to base my offer is going to be basically this 350 minus rehab. So that's when I look through the photos, which I'll do here shortly. So it's just how I kind of know like head. So, so let me, so what you mentioned, you mentioned the Mayo formula, right, which I personally don't like. And a lot of investors use it. And I don't like it for many reasons, because I feel like, uh, you can miss a lot of deals. So you can, I guess, um, you know, get to the point where the offer is going to be way too low where you could have gotten a lot higher or it could be the other way around. So, uh, however, I think it's good to know that the mail formula,

it's, it's not the mail that you put on your sandwich. Okay. It stands for a maximal allowable offer. Okay. A lot of investors and realtors use that language and use that formula for like a quick calculation. I advise against it, right? When I teach, uh, personally, I don't, I've never used it. I understand. I know what it is. And it's basically is a, uh, 70% of ARV, correct? Yeah, so it's 70% ARV minus rehab. Minus rehab. So that, if your ARV is 500 and you took 70% of that, that's 350, minus 100,000,

that would put you at 250. Now, is that a good offer? If he got this property at 250 and I'll show you on the, you know, when I open up the deal analyzer, deal analyzer, that would be a great, great deal. Now, would he be able to get it at 250? I would guarantee you that probably the answer is no. Okay. And then he would have been leaving basically money on a table in terms of not getting the deal because of using the Mayo formula.

Now, I think it's more of a calculation that investors do and say, you know, well, conservatively, if I get Mayo, I'm good. But in more in reality, they usually go above that. Would you agree? Eric. Yeah, we use it basically to say, like, are we in the ballpark? So, like, what I'll typically use it for with a lot of my investors is if they send me a deal. And let's say, I run the ARV and it's 400 and it's listed at 380, I junk it. Or if it's like 350 and then the ARVs 400, I junk it.

Because I know, like, the offer that I have to put into it's way too low. So but I know that like, so using 70% of 500 puts me at 350. I know like, okay, I'm minusing repairs. This is already listed needing rehab. So I can take that and start to basically go in and minus out the repairs. And then once we actually, so we kind of use it as like, that's our first filter for a property. And then once we walk it is where we start to make those final determinations of like,

okay, you know, this yard isn't laid out like we thought it was. Maybe it's not actually a 500 ARB or, you know, maybe that's is a larger rehab than expected. so it's not going to make sense with offering even 250. So we use it as kind of like a baseline. Is this even a deal or not? Should we look further? Now, let me ask you, did you actually go to the property or how did you determine the rehab number?

Was it just through photos and talking to the listing agent? Yeah, this one, I didn't go to the property. And I actually, so this one, and I'll kind of walk through what I'm thinking mentally when I'm running numbers and I'll even pull up my calculator and kind of show you. It'll be kind of quick. But for this one, I assumed, I mean, you can tell vanity's messed up.

Windows, there's a couple photos from the windows. You can tell they're a little bit older vinyl. Bathrooms need gutted. Kitchen needs gutted. Flooring is outdated. Chimony actually looks pretty reasonable from photos. So if we have any leaning in the chimney or something like that, that's concerning. But I don't see anything there.

No gutters. I would add gutters, even though they're not very common. In Florida, brick exterior, which isn't very common too. so it's actually kind of a nice thing. Like you're not going to have to re-stepco. So typically when I look at these photos, I can get an idea. Like I can tell right away, this roof needs replaced. AEC unit, you can tell is actually newer,

even though it's kind of farther away. Just looking at so many of them, exterior door right there needs replaced. Can I replace the sliding glass door? Some of these windows will replace, or would replace, I should say. So we base it off photos. I've looked at enough at this point to at least give me in the ballpark. Yeah, and I agree. I think by looking at the photos, you can tell it just, it needs everything, basically, inside, outside.

So you then, you already know your numbers. You have your number of about 100,000 should be enough to do all of that. Talk to the listing agent to see if there's anything else, maybe that you can't see that they might mention. Like, oh, maybe there's a, I don't know, a crack slab or who knows, right? Things that photos won't reveal, but the agent might say, or maybe the description might tell us, right? But okay, so majority of the properties you're looking at for your investors, you're able to look at it through the photos, talk to the agent if you need to determine the rehab number and literally submit an offer. And then if it gets accepted, then you guys go and confirm everything. Yeah, or even if we like look at it.

So like this one was one that I sent out to three different investors. I've been three of my investors buy boxes in the Tampa area. And if any of them, like typically what I'll do is I'll send it out and say, hey, let me know when you want to go take a look at this. here's the numbers, kind of break it down in an email. Like this is what I'm thinking like ARV is going to be. This is what our rehab budget is going to be. This is what, you know, this is where it fits. This is what your estimated takeaway is going to be just kind of ballparking it.

If they're like thumbs up, let's go take a look at it. Then I'd go schedule it and we do a deeper dive. And that's when I'm actually going to walk around with the notepad and, you know, new roof. You know, it's a pretty large roof on this one. So new roof is going to be, you know, we'll say 15K, you know, four windows, place and that's when I'll actually break down the cost with them or we'll do it with a gc. Perfect. And then once we and sometimes we'll even do inspections too.

Like this one sits on a septic. Septic is going to absolutely 100% be inspected. And we'll probably like one on this we would actually offer like, you know, this. The inspection period is just for informational purposes only except for septic. Whatever is requested on septic repairs is to be taken care of by a seller. Just because it's such a pain if you have some major issues with the septic. Perfect. Okay. So let's assume that you, you, I'm one of your investors and you sent it to me. So let me, can I share my screen now? Pull of the deal analyst. Because this is what I would do, right? If I'm the investor looking at this and Eric submitted this to me, do you see, which screen do you see?

An investor agent one. Okay. Just a bunch of pictures of me. I don't know if anybody piece this together from our group, but every YouTube clip ends up going. I don't know why, man. YouTube likes to pull my face. Where is my deal analyzer? All right. I think this is the one. Oh, here we go. There you.

Okay, cool. Now we're good. Got it. Got it. All right, cool. So, so this is the deal analyzer that I've used for over a decade or close to a decade, more than a decade. Gosh, it's been a long time.

So if Eric gives me the numbers, I'm going to zoom in, so you guys can see here. Can everybody see it? Maybe give me a thumbs up. Yep. Okay. Maybe I can even zoom in a little bit more on some of this stuff right here. All right, cool.

So on the deal allies, I have several tabs. I have the deal information tab. And this is where I'm going to start entering the information about the actual property. So Eric just said after repair value is 500. He said the purchase price that they were thinking about offering. He told me, you know, when we talked earlier, they were thinking about offering 300,000. By the time the investors got back to him, the deal is done.

And this is what, you know, we've shared this before. Like deals on the MLS don't last long. Like you got to act fast, right? That's a whole different lesson. But estimated rehab cost 100 whole time, six months from buying, rehabbing and selling. right i would say for most investors this is what i would recommend you use uh the you know the ones are a lot more experienced and maybe the rehab is lighter this could get shaved down to maybe four months especially in a seller's market but in general we use we like to use six months

property taxes we pull that off the mLS listing sheet insurance this is going to vary based on where you are i put 2500 for builders risk uh annual you know could be up, to be a little lower, could be a little higher. It's not going to make a difference if it's off by 500 bucks. This one has no gas, no water. It's unwell. And it's got electricity. So we put 120 per month.

And so that would be the deal factors that I would be plugging in. And I'll come back to the purchase price because that's going to start impacting the profitability of the deal later. Then I need to know financing. So Eric, you mentioned to me earlier when we spoke. that this client is using hard money, correct? He is, yeah. So he will be financing because he's experienced, this hard money lender is actually going to finance 100% of the deal,

which I will tell you is rare. Most hard money lenders will lend 80 to 90%, right, where the buyer has to bring in 10 or 20% down payment, and they will then also finance the rehab cost. Okay. Now, they're not going to release and give that money to the investor. They're going to keep it in an escrow account and release it in draws based on progress of the rehab. Okay.

So in this case, Eric shared this investor is actually getting 100% of the purchase price and is getting 100% of the rehab cost from this hard money lender with two points and 12% interest. So I would put two points right here, loan points and interest rate is 12. I would put that over here, which would make the loan amount, $400,000. So if you look at purchase prices 300 plus 100, that's how you come up with 400,000. If he were to buy it for 300 with a rehab cost of 100,000. So that's why the loan amount becomes 400,000. Eric shared with me that he would be coming up with the money, the buying costs out of his own pocket. He would be paying the holding cost out of his own pocket.

And usually with hard money lenders, there's going to be a monthly payment. right so all we have to do is put yes or no and if there is no monthly payment it will calculate it correctly on the other sheet in this case there is a monthly payment and it's going to be estimated at four thousand dollars okay so what else so since there's no second mortgage this is blank okay so I don't enter anything in here this is only a first loan that's all they got title insurance i don't know from florida if this is accurate you might not know this eric i i don't want to put you on a spot but i'm just going to leave it's pretty close pretty close probably um miscellaneous buying

costs i'm going to put 1200 be you know between um escrow and title and recording costs whatever probably 2 200 is a fair number in closing costs is that low what was it 2 200 for total closing costs? It's a little low. Without title. Without title. Oh, without title. Yeah.

That's about right. It's not. We don't have it too crazy. Okay. Perfect. And then on the selling costs, Eric said that he's going to be listing this property if they were to get it at 6%. Offering three to the buyer's agent and you keeping three.

Is that? Yeah. Yep. So we put 6% there. Then we got your transfer conveyance fees, which I don't know what it is for Tampa. but I'll just leave what we have in here for now. Miscellaneous selling costs. This could be, you know, notary fees, things of that nature.

Staging. I'm guessing he's going to stage. I don't know. Does this investor stage, do you know? I've only staged one property in my entire life. And it's a million dollar property. So most of them I don't. They don't stay.

Well, not you, but the investors don't stage. Wow. I've never had an investor stage. Okay. Well, then let's put zero. Well, in San Diego, I mean, 90% of my investor stage. Nice. Yeah, none of mine.

Never had anybody do it. All right. So I'll remove that. Fair. Escrow attorney fees, $1,000, recording, home warranty, marketing costs are going to fall under the realtors, so zero there. There is your selling cost. Give or take, if we're off by a $500 or $1,000, again, it's not going to make or break the deal.

Okay. Yeah. But if you get your rough numbers that you know, for your market, this is where you put it in. And the way this is designed is the deal analyzer that the yellow ones, you should not have to edit per deal. Like these are standard for whatever your market that you're in in terms of your buying and selling costs. Everything in yellow should, once you decide what those numbers are, should be not edited technically. Right. So then all you're really focusing on.

on is the things that are in the white, right? The white cells. That's where you're editing. All right, cool. So once I input all this, it takes all the information and spits it into the deal's second sheet, which is the deal analyzer for flips. And notice it carries over the $500,000 after repair value, the repair costs, purchase price. So everything I entered there, it carries it over, but it also starts calculating our holding costs automatically. So there's a lot of formulas built into this deal analyzer, so I don't have to do it in my head, right? I need to be able to plug the plug things in quick, right, on this front, on the first sheet and just tell me where I'm at. Like, what do I need to be offer wise to make this deal work and then on to the next one, right?

So when you look at the first mortgage, everything is calculated here. $8,000, that's the two points, right? Because one point is basically 1% of the loan amount. So if I'm borrowing $400,000, one point is $4,000, we're paying two points. That's $8,000. Okay. And you pay that basically up front, right? First mortgage interest is 12% annually.

Okay. So based on our six months whole time, it automatically calculates it and says that we're going to actually spend $24,000 in interest over the six months period. Right. If we kept the property for a year, that number would be $48,000, right? It would be double. Right. So my total first mortgage cost, it adds up quick, hard money is expensive. It's $32,000. Okay. No second mortgage. So those are zeros and there is just a small miscellaneous financing costs that we always like to stick in there for 500. And then the holding costs. They're all broken down by monthly on purpose because it's all then auto calculated by the amount of hold time we put in on the sheet, the first sheet. So we need to know how much is property taxes per month to calculate our holding costs correctly based on our whole time. So this is where it breaks it all down for us and starts calculating the actual holding costs per month, right, per six months. And then you got your buying fees that we entered.

So all of this gets carried over and calculated on this end. Here is your realtor fees, 6%. That's 30 grand. If we sell it for 500,000, here's your transfer conveyance. All the numbers that we've put in, including some of the calculations, again, get transferred over to this final sheet that you're looking at right now. Okay. And basically, right now, if they were to offer 300,000, conservatively, they would make $28,000. Now, to some of you, you're like, well, that's not a lot. And to some of you were like, well, I would do that deal for 28,000,

right? So everyone's going to have a different flavor of risk, right? And this is one thing I will point out right away is you might hear a lot of investors say, I will not touch anything if the cost, the ROI is not, you know, 10% or higher. Fair, but that's their flavor, right, of risk that they're willing to work with, right? Because if that's what they will tell you, then in some markets, they might not get a deal for a long time, right? I can tell you when someone asked me, you know, that question in San Diego, Randy, what is your company? What's your ROI? What are you guys looking for? I would say, I don't know. It depends on the deal because I said, if you're going to give me this property that we're analyzing right here and tell me that this is a full gut and I got

it like literally, you know, knock out some walls. There's bold. There's this. And I have to put in 200,000 into a property, even though I might get it for 200,000 to buy, but now my repair number is 200. Technically, I'm still into it for 400, but my rehab is intense. I would want my rehab profit number to be larger when my rehab is more intense. If my rehab is not as crazy and it's just a quick in and out, nothing too crazy, then I'm willing to push my limits on my profit margins and make a little less. Also, I look at, well, am I buying a property that's a 2-1 that has no yard? Well, if I'm doing that, then guess what? I want my profit to be higher because my pool of buyers are smaller. There is more risk I'm taking on. But if I'm buying a

property, that's a 3-2 with a yard, in a great neighborhood, with a driveway, with a garage, and it's your typical rehab for 100,000 inside and out, then I'm willing to maybe make 25K because I want multiple deals like that. That's how I did it. Now, again, you don't need to do it that way, but I'm sharing to you, if you're an agent listening and working with investors, you need to understand your investor's flavor.

Like, how are they, I wouldn't ask them what the ROI is, to be honest. I would ask them, you know, If I presented you a property, that's a 3-2, no negatives, beautiful neighborhood with an ARV of 500,000, what would you be okay making? I would rather know that number instead of the ROI, right? Because that can get you more deals potentially, right? And I can tell you a lot of investors are more like me because when someone asks, like, what ROI do you want?

A lot of them, well, depends on a deal. Tell me more information about the deal. And I'll let you know if I'm willing to push my limits on it. Right. So that's how I made my decisions. And Eric, I'm wondering, how are your investors? Are they usually working of a specific ROI? Are there just more like, you know what?

It's a deal by deal. Tell me the deal and I'll tell you if I'm in or not. Yeah, it's deal by deal. Like if it's a really, really good area and they know that like, because I was telling Randy before this, like this, I run. I'm kind of counterintuitive. I run my numbers as conservatively as I can. So, like, I realistically feel like I can probably sell this for around 520. And most agents are going to obviously, you know, push that up and say, well, I can sell this for 520.

But I would rather tell my investors, like, you know, 500. Let's be conservative. Market's been a little bit slower. And if I pulled up, like, the Zillow link, there's like, it's a nice area and it's on a lake and there's a lot of benefits. But also just with the way our market is, there's a lot of inventory. So, you know, there's like 12, 13 other homes listed in the area. So I went a little bit more conservative on that, but also on like the rehab being 100K, I went over on that.

Until we walk the property, I'll start knocking it down from that 100K. I work high and then I go low as we start to go through it. And we still keep like a good contingent in there. But it's deal per deal. I mean, I've had, you know, I've had investors where I'm like, I wouldn't touch this deal, but they love the area and they know it. And I know that it's like, you know, high growth, like even in Cincinnati where there's neighborhoods where it's like, yeah, I don't care if that's what your ARV is now. Like in six months when we wrap this up, we know it's, they're kind of betting on appreciation.

So I think it just kind of depends. Yeah. Perfect. And that's how I operated. And I find a lot of investors, that's how they operate. So learn your investors kind of, you know, way how they analyze deals. If you're the investor yourself and you're working with realtors, what I would do is actually educate the realtors on these numbers because a lot of realtors

are just not experienced working with investors. So if you're calling a listing agent, right, and you're telling them, you know, hey, by the way, can you represent me? Like a lot of things, a lot of things we teach, or at least I do, is go through the listing agent if dual agency is allowed, right? So if the listing agent is also representing you, and you present them with an offer at 300,000 with no explanation of how you arrived at it, a lot of listing agents that never work with investors because they just maybe happen to get a listing that needed work fall in their lap, but that's not really where they operate as an agent. It might make you, it might scare them. They might be like, wait, I have to present an offer at 300 to my client or 250. Like, what the heck?

So I, what I would teach, you know, I used to do this to myself, then I would teach my acquisitions guys to do this. I wanted my, you know, my acquisitions guys to first get on the same page with the listing agent on these things. Like, hey, Mr. Listing agent, by the way, before we, you know, talk about the offer that we came up with, what do you think the property would sell for if it was fully renovated? I want to know what they're thinking. because if they think it's 550 and I think it's 500, we're already off by 50K just to start. So whatever offer I present to that listing agent, and even though I'm asking them to represent me and they might be excited to do so, they might feel weird presenting that low of an offer or they might not want to do it with you, right? Work with you in the future unless you educate them.

Like, wait, by the way, so how did you come up with 550? Maybe I missed something. Can you send me those comps, right? And I would play naive and ask that agent to send me the comparables so I can start comparing and be like, hey, here's the comps I use. Here's your comps. Great. And what I'm trying to do is get on the same page with the agent that, hey, you know what?

The after repair value is actually 500. Would you agree now? Oh, yeah. You know what? You're right. I think that's a safer number. Or maybe I was wrong. And then I can increase it to 525.

Right. But I also, I always wanted to be on the same page as an investor and the agent that's representing me on the after repair value because all of the calculations start from there, right? What is the ARV? What is the actual repair cost? And then I would start educating the agent. So by the way, you know, so we're on the same page on the ARV. Yes. Okay. So just so you know, Mr. Agent, I used a rehab amount of about 100,000 on this property. We're going to hold it for about six months. You know, yes, we, you know, we, we say we use cash, but, you know, we pay interest on the cash. So we have financing costs, right, on the cash that we use, right? So I literally educate my agent to so they understand how quickly money disappears, right? Because a lot of realtors,

they just don't get it. Nothing against them. They're just not educated. I went as far as sending them a PDF of this. And I would be honest, like, look, if all goes perfect, right, which it never does, and I chuckle, right, because it never does, right? We are looking to make about $28,000 on this deal if we were to submit an offer with you at $300,000. So with everything I just told you, how do you feel about that, Mr. Agent? And I can tell you, they take, you know, it still shocks a lot of realtors, right?

But then they take it, they can look at it from your point of view because I've explained how I arrived at that number, and I'm not trying to make a killing. And I told them exactly what I'm looking to make, if all goes perfect. Right. And this is where I think a lot of investors or new realtors working with investors fail, because they don't get on the same page with the realtor that they're about to submit an offer on on behalf of their client. Right. So just the side kind of education piece, right? But also, it's kind of kind of kind of related to the deal analyzer because I literally would share this with them. And if any of you, I don't know if you have this type of a deal analyzer or not,

but if you would like this, I'm more than happy to share with you guys. Eric, if you want to, can you type in my email, Randy at Realty National? Yeah. And I'll email you guys this deal analyzer that we use because you're here in attendance. Because you're here live, you're going to get as a gift. So congratulations. But there's a hand rate. So I'm going to go to Cornell.

Go ahead. Thank you, guys. So I have a quick question. I'm a duly licensed as a realtor and lender, and I'm also certified as an express certified offer, whatever that means. The investors I work with, they don't want to see the property listed in the MLS. The investors you're referencing, do they care if any property is listed in MLS? Like you mentioned, Eric, you found. it in MLS. Excuse me. Yeah, I've definitely had investors that don't want deals on the market sent to them, but I will say, like, as a realtor, you can do marketing for off-market properties and do with that as you want.

But that's something that we've had conversations with investors where it's just something that we, like, if they want to do it, we'll help them, we'll help them target, we'll help take inbound leads and things like that. but we won't directly spend it. So, and I think a good, like, you know, thing to hit somebody back with it. They're like, hey, I don't want a deal unless it's off market. It's like, okay, well, if I find you a good deal on market, you don't want me to send it to you.

And most investors, if they're serious, they don't care whether it's on or off market. They just want the deal. Yeah. So I don't want to get off topic. Good question. And I would answer real quick to you. I've built my whole investing business in San Diego.

when I was running that company for seven years, we filled 350 homes and 90% of them came from the MLS. So if just find the investors that don't care. And I didn't care. Right. So that's it. There's plenty of investors that will, they don't care where the deal comes from. The numbers make sense. They're going to go after it.

Right. Yeah. That's how I feel like it. But yeah. Okay. Thank you guys. No problem. So let me show you the power of this, right?

So imagine that Eric offered $350, right? All I do is I go. here and just be like, all right, well, at list price, what would this look like? Negative 26,000. Congratulations. You got yourself a negative property, right? You're going to lose money at list price. If all these numbers are true.

And I do think, you know, 500 is good number because we are, you know, in, in Tampa from what I see, it's, it's a buyer's market right now, right? So we have to be conservative. And rehab costs, you might be right on the on the money here, dude, because quite honestly, what it used to cost me 70,000 to rehab a whole house. 100,000 goes quick now. So you right there on this number, man. So the one thing with the 100,

the one thing with the 100 is we're like cheaper here in terms of like repairs. So that's what I was going to talk about when we were going to go through the property. Like a roof is going to cost about 15. Even if you're talking 10,000 for windows, that's going to put you at 25. There's not a ton. You can do hurricane windows and you might be like close to 30 altogether. in between those two.

The rest of it's just cosmetic. And at 1900 a square foot, we typically try to multiply it out. And it's usually going to run for something like that, probably about 30 a square foot. But I think you can kind of get cheaper too, just because a lot of it, like flooring paint and then bathroom's kitchen is a terrible.

But yeah, and I think I'd rather run it conservatively anyways and keep that cushion in there too. Perfect. So let's assume that you locked this deal, up and honestly you know this deal I would do all day for 28,000 and lock it up personally yeah right yeah because I I know that land the lakes is great great area this property has everything that I want it's got the great square footage it's got minimum three bedrooms it's got the garage everything that a buyer wants the

there's the biggest pull of buyers for this house that's why I like it right I personally would say you know what I'm in Eric let's go let's submit an offer at 300 I might even push my a little bit, maybe 310, and maybe I would negotiate with Eric, if I'm getting close, right? If I'm getting close to getting the deal, I would say, hey, Eric, what, what if we could maybe, you know, can we do maybe like two and a half percent to the buyer's agent and maybe two and a half to you? Can we, can we do it for five percent total? How you feel about that, Eric? And especially if the agent tells you that you'll get the deal done for that. Yeah. All right. Thanks, Eric.

Man, I appreciate that. Right. Let's work together. So now we lowered that to 5%. I upped it. I upped my purchase price by 10,000. I lowered Eric's fee to five. He's a good realtor.

He likes to work as a team. That's who I always like to work with. Agents that are not stuck in their ways and they're willing to be flexible to make deals happen. Yeah. Right? And I'm like, all right, 22,000. You know what? I haven't seen the property yet.

Eric, I trust you for now. Let's lock it up. Give me that, you know, that three-day or four-day contingency for the septic. And if I go there and everything looks completely not what I thought, then whatever will end up backing out. Worst case in area. But I feel like I would lock something up in a very conservative number because Eric already understands how I work, right? He understands the ARV, which is the most important part of this whole investing game, right? So I trust him as well, but I also know that I have a potential out if I really need to back out. And in worst case, 22 is not terrible? Now, is that great? No, I would probably want to see personally minimum 25,000. But what I would probably start working on in the background is maybe I can lower some of my

financing costs. And this is where things get interesting. So before I go there, Eric, what do you want to share? Yeah, I was going to say too, like, and I don't want to get, spend too much time on it, but part of the reason this deal got sent out to multiple investors was that also had multiple action strategies. So this was one that I think you could Airbnb being on the lake, have some jeskies on the property or like a canoe or kayak, long term rental. Like this is like tons of rentals in this area, especially for the school district and stuff. So it might be one that you can burr, you're probably not going to cash flow a ton, but you'd get good appreciation with loan paydowns. I think midterm would work. There's a lot of hospitals in the area, and this is

near a really large. So I was going to say, too, like, you know, and that was included in my emails to my investors was this wasn't just a flip. This was like three or four different outs on the property, which we try to look. Like, there typically has to be too for us to do it. Got it. Got it. Yeah, and I think we were talking about maybe the next month we're going to do a similar thing, but on the rental analysis. Yep. So a deal analyzer for rentals. So because we don't have enough time to do it all in one,

we're going to break it up. So check this out. So imagine I lock this property up, right? And I buy it. And everything checks out. I buy the property. But then maybe, you know, right before closing, I end up getting better money, right?

This is where things get really interesting. So let's imagine I end up getting 100% private money instead of. So let's flip the script. Instead of hard money, I get private money. Well, actually, let's just use, let me just go back and use the top. I don't need to go through all the. So this is 5%. We agreed on.

So zero points. So private money usually will pay 10 to 12%. So let's just say I got a private. money lender at 12% with no points, right? And I got, I slipped it in there right before closing. What would that make me? All right, now it's already 30 grand. I eliminated two points because I just, I was able to find private money because I knew I had a good deal. I was a week away from closing. I brought it to some people that I know and they were willing to lend on it, right? And I just shaved off $8,000 in expenses, right? So there is $30,000, right?

Then what could happen, maybe not in Tampa right now because we're in a buyer's market, but in San Diego, what could happen, right? We might sell this property before it even like gets fully, you know, hits the market, right? Because there's buyers, there's lack of inventory. So imagine I close on the property with private money. I'm renovating it and a buyer approaches me and wants to buy it off my hands. All of a sudden, guess what? happens. I talk to Eric. I still pay him his two and a half percent because I

proved, you know, I agreed to pay him no matter what. So now I don't have to buy a pay a buyer's agent because they reached out to me directly. So my commission goes down. Staging, I guess we're not doing staging anyway. So because Eric's investors don't like staging. So there's nothing there. And then our holding time would not be six months. We probably would be in a and out of it then in four months. If I find a buyer during my renovation, there is a high probability that I'm going to get it off my books faster because the six months calculates buying, rehabbing and putting it on the market for 30 days and then an escrow for another 30 minimum, right? And then market 30 days in Tampa now, it might be more, right? But if I'm in San Diego

in a seller's market and I get a buyer right away, then my whole time gets shaved off, look what it does to the number. 52,000. Like 52 already. And I changed 2.5% and then it went from four, six months to four months, right? And I literally just doubled my returns. So I was about to make 22, 23 when I was acquiring the property. But then I exit and make 52.

Now, I would not make a decision, buying decision, assuming that this will have. happen, right? You never want to do that. This is all bonus, right? But I've seen investors buy properties with all of these crazy assumptions. Oh, the market is going to keep going up and I'm going to make an extra, you know, I'll sell it for more than the last comp because their appreciation. And no, no, no, no, like you can't make those assumptions because that's how you get out of the business quick. Or if you're the realtor working with that and that type of an investor, they might buy that property with you, you'll make your commission and then you'll never do a deal with them again because they're going to lose their shirt and lose their company right there.

Yep. Right. And most likely they're going to blame you for it. Unfortunately, you, the realtor. Yeah. Even though maybe, you know, it wasn't even your fault, but they will roll you right into that, right? So I'd rather stay conservative. Don't make a lot of these optimistic assumptions, but I want to show you how quickly the numbers change. And I don't have to calculate this in my head. I don't have to do it in a napkin. I don't have to whip out my own calculator on Excel sheet. It's all done already in this deal analyzer. Right. And I can literally just change a few numbers and I could see the potential of any property within a minute. So I want to just to share the power of something like this. If you're

working with investors as an agent, ask them, hey, by the way, you have a deal analyzer that you run your numbers through. And if you do, would you mind sharing it with me so I can basically do it for you and not waste your time with the wrong deals? And a lot of investors have something like this. If they don't, then you could be the one that says, hey, you know what? I have this deal analyzer that I use to calculate offers real quick for my investor clients. Would you like to take a look at it and then I'll send it over to you and let's get together on whatever, Monday or Friday and let's dial in these yellow numbers and your financing costs. So that way, I don't have to change them every single time.

And I would say, okay, so usually when you buy your properties, Mr. Investor, what is your financing? How do you get it? Oh, I can get private money. Great. So now you understand how they acquire, how they, you know, what are all the costs? And you can put it all in here. So then you can run all of the information for them in your deal analyzer based on the data they gave you. Right. And it will save you a lot of time. It will make you look very perfect to the investor guaranteed if they didn't have anything to begin with. And believe me, some investors, they don't. They do not have anything. They just use like the Mayo stuff. And I'm like, Like, how are you even doing this business? Right? But regardless, it will make you look like a professional.

I will say the guy that I did, my number one investor in Cincinnati that we did 50 flips with, he did Mayo. And every single time, like, we nailed it. Like, it's just like we walked. Like, you know, I'd send the property. Like, within 10 seconds, he'd be like, yeah, the deal works or like, thumbs down. We'd be at the property the next day with like an offer accepted in closing. So, like, for some people, it works. We never used a deal analyzer.

But I also know that this is more, I also think if you're a realtor and you want to show your investors, like, hey, look, this is your possible, you know, takeaway. This is the best way to do it because it's very detailed and dialed in. And if you're having a hard time getting people to pull the trigger on investment properties, this is the way to do it. Present numbers like this and in this kind of presentation, and your investors are going to, you know,

they're going to have no problem pulling the trigger. Yep. And, you know, what you'll find on this deal analyzer for some of you that are going to request it, you're going to see a repair estimator in here as well. And this is, you know, general, right? This is not per market. But if you're new to the investor, investor world as a realtor or even as an investor, this can get you in the ballpark of what that rehab amount will be. Okay. So you can literally go through this and fill in, you know, if it needs a roof and it will auto calculate it based on the information you put in. I didn't fill this in, but if I put in the square footage right here, I think it was like almost 2000. It's one unit, 2000. It was three bedrooms, three baths. But if you go to the repair estimator and you put roof, yes or no, it should auto calculate.

Well, maybe it's not auto calculating. All right. Well, I'll get you the version that it will. It should auto calculate based on the numbers that I have here. So that's interesting why it's not doing it. Let's see. So someone must have messed around with this one. But nevertheless, I'll get you the one that works.

But then this will calculate it. And the way this is designed, oh, yeah, he messed. This is someone messed around with this one. Okay. The way this is designed is that this number, this after repair value, in the one I give you, is going to get pulled into right here, this number. Estimated repair costs is going to get pulled from this total right here. Okay, automatically. I don't have the time to go through this, right, and Eric wouldn't either.

So what I do is I just overwrite this and I just type it in. Right. But I'm just letting you know that the one I'll give you if you're requesting one, it's going to be pulling the repair number from what the total is right here. Okay. And dumping it into this field and it will dump it automatically into this field. Right. What I do, I overwrite it, right?

because when you're just analyzing deals and I already are given these numbers what the repair cost is, I'm not going through the repair estimator. I just overwrite this personally and that's it, right? That's what I did here. But I just want to let you know what's in here, right, and how it calculates it. So I can't see the chat right now, but Eric, is there any questions on the deal analyzer or just overall just analysis of deals numbers wise? We had two questions while we were doing it.

I'll start with the one that had to do with this. When you get a better private money loan, how do you communicate canceling with the previous lender? Always maintain relationships. Like if you are going to switch lenders, make sure you let the other one know respectfully and just let them know why you're kind of going on that route. But I think Addison can speak to this.

Lenders are used to that happening. So it's not uncommon. And then even my hard money lenders are used to it happening. That was the only one on the deal analyzer. If anybody else has any other questions, I can answer this one too, or try to. Regarding the recent NAR DOJ proposal, how do we deal with the buyer's realtor commission since going forward? We probably can't disclose it anymore in the MLS. That's just a question.

It's going to be more like ask your brokerage. It's going to be regional. I think it's going to be different for every area, not something that we'll be able to necessarily give advice on. As we see change there we can. Calculate it. Still calculate it. I was still calculating you're paying it. Don't assume that all of a sudden you're not paying a buyer's broker.

So as investors, we're going to, nothing will change for us in terms of costs. Right. So I'm going to assume I'm going to, you know, pay a buyer's agent two and a half percent or three percent, depending where you're, you are in the market. Don't get cheap. That's not where you want to get cheap. You want to expose your property to as many people as possible. And that's a whole different conversation if you're, you know, a buyer's agent working with investors and you have to have a buyer's agreement. You probably want to have an open-ended one, right, because they probably won't commit to you only.

But that's a conversation for today. For more insights and to join the investor agent nation community, visit investoragentnation.com. If you like this episode, please subscribe to the podcast and leave a five-star rating to help brand, Andy and Eric continue delivering valuable content that resonates with you. Thanks for listening to the Investor Agent Nation podcast.