How I Assessed a Community Member's Flip

TLDR
Ross reviewed an Arizona deal for a group member using a wholesaler’s photos and video. He made a cautious first rehab budget, tested several ARVs and buy prices, and asked if the downside was still safe enough.

Table of Contents

What Ross Was Actually Reviewing

Ross did not walk or buy this home. A group member was thinking about it, and Ross had only the wholesaler’s photos and video. They used an ARV range of $500,000 to $550,000.

The visible scope had floors, paint, popcorn-ceiling removal, baths, old cabinets, stucco, yard work, trash removal, and a changed garage. The pool was the largest special item. Ross held about $15,000 for it until an expert could check its state.

Because pools were common in this nicer neighborhood, Ross wanted to keep it if possible. His alternative was to fill in a pool when the neighborhood did not support one. That decision still required an on-site review of this pool.

He also saw water damage near a roof joint, rot outside, odd add-ons, and a heater that raised an HVAC question. These were things to check and budget for, not a diagnosis from video.

The front also mattered under Ross’s big three framework. It is the filter through which a buyer sees the rest of the house, so he allowed more for landscaping and curb appeal.

A Conservative First Pass

Ross saw more than a light rehab but less than a full gut. He added money where the facts were weak. He would rather start high and lower the budget after learning more.

His fast scope included line items beginners often miss: a handyman allowance, construction cleaning, a sizable cleanout, and extra room for an uncertain pool. It was only a pricing scope. The detailed scope would come after the deal survived this first test.

Remote Review Has Limits
Photos did not prove the state of the pool, roof, HVAC, or hidden frame. They also did not set the final scope. This was a fast first price, not a final bid.

The Underwriting Test

Ross first used a $280,000 buy, a $525,000 mid-range ARV, and a 15% return goal. His tool showed about $63,685 in planned profit with those inputs.

The wholesaler was asking about $330,000. Ross then changed the inputs to see what happened. The group member would use cash instead of paying hard-money interest and points. In Ross’s model, that let the math work at a higher buy price than the first pass.

Ross stress-tested the deal with rehab rising to about $90,000 and ARV falling to about $480,000. In his model, a $325,000 purchase still appeared to leave roughly $25,000 to $30,000.

The Decision Was About Downside and Bandwidth

Ross did not give one answer for every deal. If this were the only sound deal and the area and comps made the risk feel safe, he might take it. If many deals needed the same cash and time, he would want a lower price. One response was $290,000 or nothing. Another was about $295,000 after using a more realistic ARV and a still-conservative rehab figure.

The lesson was to weigh the downside against other uses of your cash and time. Ross did not call the home an automatic pass.

FAQ

Did Ross personally assess and reject this house?

No. He remotely analyzed a community member’s opportunity and did not say he bought it.

Was $280,000 the all-in cost?

No. It was an acquisition-price input. Rehab, financing, holding, closing, and other costs were modeled separately.

Was the pool definitely a $15,000 repair?

No. Ross used $15,000 as a conservative placeholder because the pool needed specialty review.