How to Underwrite an Off-Market Fixer in Under an Hour

Off-market fixers move in days, sometimes hours. If your underwriting takes a week you will never win one. Here is the order of operations that gets you to a defensible number fast.

Step 1 — After-repair value, from closed comps only

Pull closed sales in the last 90 to 180 days, same neighborhood, similar square footage, similar bed and bath count, similar lot. Ignore active listings; anyone can ask any price. Ignore Zestimates. If the comps disagree wildly, that is information: the street may be a boundary between two different markets, and you should use the conservative side.

Step 2 — Rehab, priced by someone who swings a hammer

Walk it with a contractor, or send photos and video if you cannot. Get a line-item number, then add contingency — 10% on a cosmetic scope, 20% or more on a gut, and more again on fire damage, foundation work, or unpermitted additions you have to legalize or remove.

Step 3 — Carrying and transaction costs

Loan points and interest for your real holding period, taxes, insurance, utilities, and both sides of closing plus the resale commission. On the coast, six months of carry on a hard-money loan is a serious number. Do not use three months because your last flip went fast.

Step 4 — Your required profit

Decide before you look at the deal, not after you fall in love with it. Then:

Max offer = ARV − rehab (with contingency) − carrying costs − closing and selling costs − required profit

That is the whole model. The "70% rule" is a screening shortcut for that math, not a substitute for it — useful to triage a blast list in 10 seconds, useless for deciding what to actually pay.

Where flips actually go wrong

Time, not money. Permit timelines, a contractor who disappears mid-job, a resale that lists into a slow month. Every one of those shows up as carrying cost. Build the schedule as carefully as the budget.

The other common failure is scope creep on the finish level. Finish to the comps you underwrote, not to the house you would want to live in.

Before you offer

Have proof of funds or a hard-money term sheet in hand, know which exits you will accept if the flip does not sell at your number — rent it, refinance it, wholesale it — and confirm the property actually fits your buy box before you spend an afternoon on it.

Get fixers that match your numbers

Tell OffMarketCarly your markets, price ceiling, rehab appetite and funding, and matching off-market fixers get sent to you. Nationwide, with the heaviest flow in Southern California and Cleveland. Call or text Carly at 619-736-9176.

Nothing here is legal, tax or investment advice.