Methodology: How Our Calculators Work — and What They Don't Do

Most deal calculators hide their method. Ours publish it. This page states the formulas, the default assumptions and the deliberate biases built into the Real Estate Deal Analyzer and the House Flip Analyzer — so you can reproduce every number by hand, disagree with any choice we made, and adjust for it.

First, the honest framing: these tools are new. They have no user base to cite, no reviews to quote and no endorsements to display, and this page will not invent any. What they have is a method, published here in full, and sample deals you can check line by line.

The formulas (nothing proprietary)

Rental analysis

Flip analysis

If you can compute these, you do not need our spreadsheets. The spreadsheets exist to compute them consistently, keep the deal saved, and stress-test it — not to keep the arithmetic secret.

The conservative-default policy

Every default in these workbooks is chosen to make a deal look worse, not better:

• Vacancy is never 0%. Even a currently rented property sits empty between tenants. Our guidance: ~5% for single-family in strong markets, ~7–8% for small multifamily — and the sample deals use real vacancy, not zero.
• CapEx is a separate line, always. Roofs, HVAC and appliances are budgeted as their own reserve (5% of rent in the rental sample) instead of being folded into a vague “repairs” figure that quietly shrinks.
• Flip interest is modeled on the full loan from day one, even though many hard-money lenders charge on drawn funds only. If your lender charges on draws, your real financing cost will be lower than the model — the safe direction for an error.
• Contingency is a budget line, not a hope: the rehab budget carries it explicitly, and our guidance is that a deal requiring zero contingency is not a deal.
• Selling costs are never skipped — 7.5% of ARV in the flip sample, because “we'll sell it ourselves” is a plan, not a default.

The sample deals — including the one that fails

Each workbook ships with a complete worked example, and we publish the results here so you can check them before buying anything.

Rental sample: price $250,000, rent $1,800/mo, 20% down, 7%/30 years.

This deal fails. It is the pre-loaded example because a screening tool that cannot say “walk away” is a sales brochure, not a tool.

Flip sample: buy $135,000, rehab $45,000, ARV $260,000, 6-month hold, hard money 85% loan-to-cost at 12% interest-only with 2 points.

Stress-tested: ARV −20% turns it to −$6,440; rehab +50% leaves +$17,630. Both results ship in the file — the good one and the bad ones.

Both sample workbooks were independently recalculated (every control figure recomputed outside the workbook) before release; the flip workbook additionally carries a Model Checks sheet that re-verifies eight internal identities every time you use it, and flags CHECK if an edit breaks a formula.

Corrections policy

If a formula error is found — by us or by a buyer — it is fixed in the file, the version is updated for all buyers, and the correction is logged publicly on this page with the date, the affected calculation and the size of the error. No silent fixes. (Log: no corrections to date — the tools are new, and this log starts empty rather than padded.)

What the calculators don't do

• They don't verify your inputs. Garbage in, garbage out: a wrong tax figure or an invented ARV produces a confident, wrong answer. Verification is what due diligence is for.
• They don't predict markets. No appreciation forecasts, no rent-growth promises — where growth rates appear (the 5-year projection), they are your inputs, shown as arithmetic, not foresight.
• They don't replace professionals. Tax treatment, legal structure, lending terms and physical condition each need their own expert.
• They are not advice. They are arithmetic with published assumptions.

The tools themselves

The free Lite rental analyzer and free Lite flip analyzer implement exactly the formulas above for a single-pass screen. The Full versions — Real Estate Deal Analyzer and House Flip Analyzer — add sensitivity grids, a 5-year projection, BRRRR and deal comparison on the rental side, and the full project layer (budget, expense log, quotes, change orders, payments, dashboard) on the flip side. Same formulas, same defaults, more depth.

These spreadsheets are calculation tools only and do not constitute financial, investment, tax, or legal advice. Verify all figures with licensed professionals before purchasing any property.