Deal analysis is the skill that protects every other skill. Finding leads, talking to sellers, managing contractors — none of it helps if you bought the wrong house at the wrong number.
I’m Ben Lovro, a South Carolina real estate investor, and these are the underwriting questions I get asked most. The answers are short on purpose. Each links to the deeper guide.
If you want the full sequence first, start with how to analyze a real estate deal. If you’re planning a flip, the 70 percent rule page shows how ARV turns into an offer. And if you invest around the Midlands, flipping houses in Lexington SC adds local context.
Got a real deal you want a second set of eyes on? Post it in REI Skool — it’s free, and that’s exactly what the community is for.
Straight answers
What is a good ARV?
A good ARV isn’t a high one — it’s a provable one. It’s supported by at least three recent sold comps that truly match the subject, adjusted honestly for differences, and expressed as a range. Underwrite toward the conservative end. See how to calculate ARV.
How accurate are online home value estimates?
Accurate enough to be curious about, not accurate enough to underwrite with. Automated estimates usually don’t know the condition of the house or of the sales they compared it to, and distressed or dated properties are where they tend to miss most. Build your number from sold comps you’ve reviewed yourself.
How many comps do I need to value a property?
At least three good sold comps that meet strict rules: recent, close by, same school zone, no highway or railroad between, same beds and baths, within ±20% square footage, and similar age and style. My full rules are on how to pull comps.
What is the difference between ARV and as-is value?
ARV is what the property should sell for after it’s renovated to the level of the renovated comps. As-is value is what it’s worth today in current condition. Pull renovated comps for ARV and dated or unrenovated comps for as-is — and don’t mix them.
What is MAO in real estate?
Maximum allowable offer — the most you can pay and still have the deal work for your exit. For a flip, the quick screen is MAO = (ARV × 0.70) − repairs. The formula changes for rentals and other exits; see the maximum allowable offer formula.
How do I estimate repairs if I'm not a contractor?
Walk the property with a repair sheet organized by system, write down what you see and suspect, and build local price ranges with a contractor you trust. Add a contingency — roughly 15% to start. The full method is on how to estimate rehab costs.
Should I analyze a deal differently for a rental than a flip?
Yes. Flips are driven by ARV, repairs and time. Rentals are driven by rent, operating expenses, vacancy, capital reserves and financing. Decide the exit first, then use the right formula. See how to analyze a rental property.
What are the biggest red flags in a deal?
Foundation movement, water intrusion, failing septic, title problems, zoning conflicts, flood zones and functional obsolescence. Each can turn a good-looking deal into a bad one. See red flags when buying investment property.
When should I walk away from a deal?
When your honest MAO is below what the seller will accept, when a red flag can’t be fully understood or priced, or when the deal only works with optimistic assumptions. Walk away politely and keep following up — circumstances change.
How long does it take to analyze a deal?
A first screen can take a few minutes once you know your market. A full analysis — comps, adjustments, a walk-through, a line-item budget and a risk check — takes longer. The more houses you underwrite, the faster and more accurate you get.
Is there a deal analyzer I can use?
Yes. My free investor playbook includes the one-page deal analyzer I use to run ARV, repairs, exit and MAO in a consistent order. Get it at benlovro.com/learn-real-estate.