The 5-Minute Deal Evaluation Framework
This is how The Hard Money Co. evaluates a deal—and it’s how you should be thinking about your own. You don’t need to overcomplicate it. Before spreadsheets, before closing timelines, before you start convincing yourself it’s a good deal, run it through this quick mental checklist. These are the same fundamentals lenders look at when deciding whether your deal makes sense. If it doesn’t work here, it’s probably not going to work later.
Purchase Price: Don’t Overpay at the Start
This is where the money’s made. If the numbers don’t work at the price you’re negotiating, walk. Too many investors fall in love with the deal and convince themselves they’ll make it up later. You won’t. Pay too much up front and you’re already behind before the first demo day. A good purchase price gives you room to absorb surprises, hit your return targets, and still come out ahead. Be aggressive, be a strong negotiator, and most importantly be disciplined.
Rehab Cost: Know Your Scope
Trying to save money by going cheap usually backfires. Investors cut corners thinking they’re being scrappy, but what they’re really doing is setting themselves up for delays, do-overs, and more expensive fixes down the line. Cheap labor misses details. Skipping permits creates headaches. Half-finished work kills your timeline and your momentum. Spend the money to do it right the first time.
The best investors don’t just have a rough idea of what needs to be done—they have a detailed, line-by-line plan. There’s no such thing as a scope of work that’s too detailed. Know every fixture, finish, and timeline checkpoint. Not only does this keep your crew accountable, it tells your lender that you’ve thought it through. You’re not guessing. You’re executing.
ARV: Run the Comps
A shaky ARV will wreck your entire deal. Don’t pull a number out of thin air or use the highest comp just because it makes the math look good. Find real comps—same neighborhood, similar size, layout, and condition. Look at what’s actually selling, not just what’s listed.
Once you’ve got your comps, gut check the number. Does your projected ARV leave enough room to profit after purchase, rehab, and holding costs? If the margin’s thin, it’s not a deal, it’s a gamble. Be honest with yourself. If the ARV doesn’t give you breathing room, move on.
Cash Savings: No Free Lunches
Real estate takes capital. No lender is funding 100% of your deal, and they shouldn’t. You need to have skin in the game. That shows commitment. It proves you’re taking the risk seriously. Even with hard money, you’ll need to bring something to the table, so don’t fool yourself into thinking you can get started with nothing. Save up, get creative, and be ready.
Conclusion
A good deal doesn’t need to be complicated, but it does need to clear a few basic hurdles. Run through these four checks before you commit. If the numbers work, the scope is solid, and you’re bringing real capital to the table, you’re on the right track.
