How to analyze a wholesale deal
Analyzing a wholesale deal is four checks in order: establish the ARV from renovated sold comps, scope the repairs with a contingency, compute the buyer's ceiling and subtract your fee to get your contract price — then run the deal from the buyer's side and confirm they'd still clear their return at your number. Most wholesale deals that fail did so at the fourth check, which is also the one most often skipped.
Establish the ARV
Renovated sold comps within half a mile and six months, median price per square foot, times the subject's square footage — and write down the range, not just the point estimate. The full method is in how to calculate ARV, and if the comp set is thin the correct response is a lower offer rather than a wider search.
Our example property: 1,600 ft², median renovated comp $241/ft², ARV $385,600, range $349,000–$405,000.
Scope the repairs
A single number is not a repair estimate; a list is. Categories, quantities, and a contingency sized to how much you actually saw:
| Category | Estimate | Basis |
|---|---|---|
| Kitchen | $16,000 | Mid-grade cabinets, counters, appliances |
| Bathrooms (2) | $11,000 | Full replacement, standard fixtures |
| Flooring throughout | $9,000 | 1,600 ft² at about $5.60 installed |
| Paint, interior and exterior | $7,000 | |
| HVAC | $7,000 | Unit is 22 years old |
| Contingency, 10% | $5,000 | Walked the property; no visible structural issues |
| Total | $55,000 |
Contingency scales with ignorance: 10% when you've walked it, 20% when you've only seen photos, 30%+ when you haven't been inside at all. A sight-unseen deal with a 10% contingency isn't an estimate, it's a hope.
Price the assignment
| Line | Amount |
|---|---|
| ARV | $385,600 |
| × 70% | $269,920 |
| − repairs | −$55,000 |
| = buyer's ceiling | $214,920 |
| − assignment fee | −$12,000 |
| Your maximum contract price | $202,920 |
Say the seller agrees at $195,000. Your assignment sells at $207,000 and your fee is $12,000, comfortably under the buyer's ceiling. So far the deal works — from your side.
Do checks 1 and 2 in a minute
Faro pulls the comps and values the property for any US address, so the two numbers everything else hangs off aren't the ones you guessed at.
Now run it as your buyer
This is the check that decides whether the assignment actually sells. Take your $207,000 assignment price as their purchase price and build their project:
| Buyer's line | Amount |
|---|---|
| Sale at ARV | $385,600 |
| Purchase (your assignment) | −$207,000 |
| Renovation | −$55,000 |
| Buying costs | −$4,500 |
| Holding, 5 months | −$14,500 |
| Selling costs, 6% | −$23,140 |
| Buyer's profit | $81,460 — 21% of ARV |
Twenty-one percent of ARV clears any reasonable threshold, so this assignment sells. Now test it: if the ARV is really $366,000 rather than $385,600 and the repairs come in at $68,000 instead of $55,000 — both entirely ordinary misses — the buyer's profit falls to about $50,000, or 14% of ARV. Still viable, but visibly thinner, and a third simultaneous miss would end it.
That stress test is what separates an analysis from a pitch. Run it before you sign the seller, not after your buyer's list goes quiet.
What the arithmetic won't tell you
- Title. Liens, unreleased mortgages, judgments, incomplete probate, missing heirs on an inherited property. Order a preliminary title search early; it is the cheapest thing in the process and it kills more deals than valuation does.
- Occupancy. A tenant with a lease, or a family member living there informally, is a timeline problem your buyer will price for — and in some states an eviction takes longer than the whole renovation.
- Seller motivation. A seller who agrees to your number and then can't sign for three months is a common outcome with estates and divorces. Understanding why they're selling predicts whether the contract survives.
- Your assignment rights. Contract language and state law vary; some states have added disclosure or licensing requirements for wholesaling in recent years. Check the current rules where you operate before you build a pipeline on the assumption you can assign freely.
Common questions
How long should analyzing a wholesale deal take?
Twenty to thirty minutes for one you're seriously considering, and about two minutes for the screen that decides whether it deserves the thirty. The screen is ARV against asking price: if the seller wants more than about 75% of ARV and the house needs work, the arithmetic almost never recovers.
What makes a wholesale deal fall apart?
In rough order: an ARV built on the best comps rather than the median; a repair estimate made from the curb that doubles after a walkthrough; a fee that leaves the end buyer below their return threshold; and title problems — liens, unreleased mortgages, probate not completed, missing heirs. The first three are analysis failures and are entirely preventable.
Do I need to inspect the property?
You need to see it, which is not the same as a formal inspection. Twenty minutes inside with photographs is enough to move a repair estimate from a guess to an estimate, and it's the difference between a contingency of 10% and one of 30%. The cases that go badly are almost always the ones nobody walked.
How do I check my buyer's math?
Model their project: your assignment price as their purchase, the repairs, holding costs for a realistic timeline, and about 6% selling costs against the ARV. If their profit lands under roughly 12% of ARV, expect the deal to sit unassigned however good it looks from your side.
Related guides and calculators
How to calculate MAO
The maximum allowable offer formula, both versions, and how to pick the percentage honestly.
What is a good wholesale spread?
What the fee actually runs, and how to tell a thin spread from a deal that will fall apart.
How to run comps on a property
The full process on one address — search box, adjustments, weighting, and the range you should quote.
How much should a wholesaler offer?
Working backwards from your buyer's ceiling to a number you can actually sign.
Check the deal before you tie it up.
Faro values any address from real comps and shows the returns at any purchase price — including the one you're about to offer.
Estimates for analysis and educational use only — not financial, investment, tax, or legal advice. Verify every number independently before making a purchase decision.