Deal Underwriting Workbook

A framework for analyzing investment property deals and projecting returns.

1. Purchase Price Analysis

All-in acquisition cost:

Purchase price
Closing costs (title, escrow, lender fees)
Inspection and due diligence
Any immediate repairs before rehab

Example:

Item	Amount
Purchase price	$150,000
Closing costs (2%)	$3,000
Inspection	$500
Total acquisition	$153,500

2. Renovation & Holding Costs

Renovation budget:

Line-item breakdown by room/trade
Contingency (10–15%)
Permits and fees

Holding costs (monthly):

Loan interest (interest-only during hold)
Property taxes
Insurance
Utilities
Lawn/snow (if vacant)
Property management (if applicable)

Example (6-month hold):

Item	Monthly	6 Months
Interest (12%, $120K loan)	$1,200	$7,200
Taxes	$200	$1,200
Insurance	$100	$600
Utilities	$150	$900
Total holding	$1,650	$9,900

3. Financing Costs

Hard money typical terms:

Points: 2–4% of loan amount (upfront)
Rate: 10–14% (interest-only)
Term: 6–18 months

Example:

Item	Calculation	Amount
Loan amount	70% of $200K ARV	$140,000
Points (3%)	$140,000 × 3%	$4,200
Interest (6 months @ 12%)	$140,000 × 12% × 0.5	$8,400
Total financing cost		$12,600

4. Exit & Selling Costs

When you sell:

Agent commission (5–6%)
Closing costs (1–2%)
Staging, photos, marketing
Concessions (if negotiated)

Example (sale at $200K ARV):

Item	Calculation	Amount
Commission (6%)	$200,000 × 6%	$12,000
Closing costs (1.5%)	$200,000 × 1.5%	$3,000
Total selling cost		$15,000

5. Profit Projection

Fix and flip formula:

Profit = ARV − Purchase − Renovation − Holding − Financing − Selling

Example:

Item	Amount
ARV	$200,000
Less: Purchase	($153,500)
Less: Renovation	($35,000)
Less: Holding	($9,900)
Less: Financing	($12,600)
Less: Selling	($15,000)
Net profit	$27,000

Return metrics:

Cash invested: Down payment + points + holding + renovation = ~$68,700
Cash-on-cash return: $27,000 ÷ $68,700 ≈ 39% (on 6-month hold)
Annualized: ~78% if you could repeat twice per year

6. Sensitivity Analysis

What if ARV is 5% lower?

ARV: $190,000 → Profit drops to ~$17,000

What if renovation runs 20% over?

Renovation: $42,000 → Profit drops to ~$20,000

What if hold period is 9 months?

Extra 3 months holding: +$4,950 → Profit drops to ~$22,050

Stress test: Run scenarios for -10% ARV, +20% renovation, +3 months hold. If profit stays above your minimum, the deal has margin for error.

Deal Underwriting Workbook