Every day, we receive real property deals from communities across Texas directly from homeowners and brokers. These opportunities are available when sourced, and each one on our Daily Deals board starts with the numbers—not the before-and-after photos. In this post, we take a closer look at a featured deal in Conroe, Texas, and walk through our fix-and-flip analysis using illustrative financial estimates. From estimating After Repair Value (ARV) to setting a purchase price that makes the deal work, we show how we test the assumptions before deciding what we would be willing to pay.
Note: The featured property is a real deal that was available when sourced. Confirm current availability before proceeding. All financial figures below are illustrative estimates—always verify comps, walk the property, and confirm costs with qualified local professionals before committing.
Featured Deal Snapshot
| Property | Details | Market |
|---|---|---|
| 3-bed / 2-bath single family | 1,480 sq ft • built 1988 | Suburban, strong resale demand |
| Condition | Dated but structurally sound | Avg. days on market: 28 |
| Strategy fit | Fix-and-flip or BRRRR | Comp range: $270k–$320k |
| Location | Conroe, Texas | Available when sourced; financial figures illustrative. |
Running the Numbers
A fix-and-flip deal lives or dies on three numbers: the purchase price, the rehab cost, and the After Repair Value. Get any one of them wrong by 10% and a projected profit can turn into a loss at the closing table.
Step 1 — After Repair Value (ARV)
ARV is the estimated market value once renovations are complete, and it is the cornerstone of the entire analysis. We anchor it with 3–5 comparable sales within half a mile, sold within the last six months, similar in size and condition — using sold prices, never list prices. For this property, the comps support an ARV of $300,000.
Step 2 — Rehab Budget
We itemize the scope — kitchen, baths, flooring, paint, HVAC service, and a contingency line — rather than guessing a round number. For a cosmetic-plus refresh on a home this size, we budget a $50,000 rehab, including a 10% contingency because surprises are the rule, not the exception.
Step 3 — Maximum Allowable Offer (the 70% Rule)
The 70% rule says pay no more than 70% of ARV minus repair costs. The formula is ARV × 0.70 − repairs = Maximum Allowable Offer (MAO). The 30% you hold back is not profit—it covers financing, holding costs, and closing on both ends. Your profit is whatever is left.
| Calculation | Amount |
|---|---|
| After Repair Value (ARV) | $300,000 |
| × 70% | $210,000 |
| − Estimated rehab | − $50,000 |
| Maximum Allowable Offer (MAO) | $160,000 |
If we can get this property at or below $160,000, the deal clears our first screen. The 70% rule is a fast screening tool, not a final answer—we still run the full deal math before making a real offer.
Exit Strategy: Flip vs. BRRRR vs. Rental
The same property can be played three ways. Here is how the illustrative numbers compare across a fix-and-flip exit, a BRRRR (Buy, Rehab, Rent, Refinance, Repeat) hold, and a straight long-term rental.
| Metric | Fix-and-Flip | BRRRR | Rental |
|---|---|---|---|
| Purchase price | $160,000 | $160,000 | $160,000 |
| Rehab | $50,000 | $50,000 | $50,000 |
| Holding + financing + selling | ~$45,000 | ~$18,000 | ~$12,000 |
| Projected profit / equity captured | ~$45,000 | ~$72,000 equity | ~$90,000 equity |
| Hold time | 4–6 months | Long-term | Long-term |
If You Hold It: Cash Flow & Returns
For the rental and BRRRR scenarios, we underwrite monthly cash flow and the two return metrics that matter most to buy-and-hold investors — capitalization rate and cash-on-cash return.
- Projected rent: $2,150/month based on local comparable rents.
- Operating expenses: ~$750/month (taxes, insurance, maintenance reserve, vacancy, property management).
- Net operating income (NOI): ~$16,800/year.
- Cap rate: ~5.6% against the $300,000 ARV, higher against the all-in basis of $210,000.
- Cash-on-cash: strongest in the BRRRR scenario, where a refinance pulls most of the invested capital back out.
Risk Factors We Flag
No deal analysis is complete without naming what could go wrong. The whole model is only as good as the ARV and the repair number — get either one wrong and the math lies to you.
- ARV risk — thin or stale comps can overstate resale value. We require recent, nearby, like-for-like sales.
- Rehab overrun — hidden foundation, roof, or systems issues. The 10% contingency is the first line of defense.
- Holding-cost creep — every extra month of hard-money interest and carrying costs chips away at the margin.
- Market shift — a softening market or longer days-on-market compresses the flip exit.
The Bottom Line
At a purchase price of $160,000 or below, this deal clears the 70% rule with room for a ~$45,000 flip profit or a strong BRRRR hold. Above roughly $170,000, the margin gets thin and we’d pass — or renegotiate. It is a buy on our terms, not at any price.
Disclaimer: This post is for informational and educational purposes only and is not investment, legal, or tax advice. All figures are illustrative estimates, not a valuation or verified transaction. Deal availability and conditions may vary — verify comps, walk the property, and confirm costs with qualified local professionals before committing to any deal.
Daily Deals Reading List
- Fix and Flip Guide, BiggerPockets
- 70 Percent Rule for Real Estate
- 70% Rule in House Flipping: Formula, Examples & Calculator
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