How to Analyze a Real Estate Deal in Under 10 Minutes
Use These Shortcuts, Rules of Thumb, and Tools to Quickly Spot Winners (and Dodge the Duds)

Let’s face it—time is money in real estate. Whether you’re hunting for your first house hack, a rental in a new city, or evaluating a commercial strip center, you don’t always have hours to break out spreadsheets and underwrite every lead.

The good news? You don’t have to.

With the right rules of thumb and the best online tools at your fingertips, you can analyze most deals in under 10 minutes—and confidently decide if they’re worth deeper due diligence.

✅ Step 1: Use the 1% Rule for Quick Screening

Rule of Thumb:
If the monthly rent is at least 1% of the purchase price, it’s worth a deeper look.

📍 Example: A duplex listed for $200,000 should rent for $2,000/month or more.
If it rents for only $1,200/month, the cash flow is likely too tight (unless it's a screaming off-market deal with serious upside).

Use Tools Like:

• HUDuser.gov – Small Area Fair Market Rents to estimate what rent should be in a given ZIP code.

• Rentometer, Zillow Rent Comps, or Propstream for fast local rent estimates.

✅ Step 2: Estimate Cap Rate for Buy & Hold or Commercial Deals

Formula:
Cap Rate = Net Operating Income (NOI) / Purchase Price

Rule of Thumb:
Most investors want to see Cap Rates of 6%–10% depending on the market and risk level.

📍 Example:
A 4-unit that brings in $4,000/month in rent, with $1,200/month in expenses =
NOI = $2,800/month x 12 = $33,600/year
If purchase price is $400,000 → Cap Rate = 8.4%

Use Tools Like:

• BiggerPockets Rental Property Calculator

• DealCheck.io – fast mobile-friendly deal analyzer with visual reports

✅ Step 3: Check Cash-on-Cash Return

Formula:
(CoC) = (Annual Cash Flow) / (Out-of-Pocket Costs)

Rule of Thumb:
Aim for 8–12%+ cash-on-cash return for long-term rentals.

📍 Example:
You buy a duplex for $250,000 with 20% down and $5K in closing/repairs = $55,000 invested.
It nets $6,000/year cash flow → CoC Return = 10.9%

Tip:
Include ALL out-of-pocket costs: down payment, closing costs, repairs, and reserves.

✅ Step 4: Check DSCR if Financing with Rental-Based Loans

Formula:
DSCR = NOI / Annual Debt Payments

Rule of Thumb:
Most lenders want a DSCR of 1.2 or higher to approve the loan.

📍 Example:
NOI = $33,600/year, debt payments = $28,000/year
DSCR = 1.2 – you’re good to go.

Use Tools Like:

• MortgageCalculator.org – plug in loan terms fast

• Ask your mortgage broker or DSCR lender for sample underwriting worksheets.

✅ Step 5: Run Sales Comps and ARV for Value-Add Deals

Looking at flips or BRRRRs? You need to know After Repair Value (ARV) and renovation costs fast.

Use Tools Like:

• Redfin or Zillow "Recently Sold" filters for comps

• Realtor MLS Access via your local real estate agent or broker

• FlipperForce or Homewyse.com for general contractor estimates

• Local contractors via Thumbtack, Facebook Groups, or Referrals

📍 Example:
Purchase Price: $180K
Repairs: $40K
ARV: $280K → Potential $60K margin
Now back out holding and selling costs, and see if there’s still profit left.

✅ Bonus: Short-Term Rental? Use AirDNA or Mashvisor

AirDNA lets you estimate:

• Occupancy rates

• Average daily rents

• Revenue potential per ZIP or neighborhood

📍 Example:
A cabin in Blue Ridge shows 75% occupancy at $225/night = $5,000+/month gross income
Now subtract expenses, estimate cash flow, and compare it to your financing.

✅ Final Step: Plug It All into a Calculator

Use a Deal Analyzer Spreadsheet:
Includes tabs for:

• Rental analysis

• BRRRR

• Flip

• DSCR

You can also bookmark:

• DealCheck.io

• BiggerPockets Calculators

• AirDNA MarketMinder

🙋‍♂️ Need Help?

Your real estate agent, mortgage lender, or commercial loan officer can assist with pulling comps, understanding financing, or running detailed analyses.

Pro Tip:
Team up with professionals who invest themselves—they speak the same language and can save you from costly rookie errors.

🕒 The 10-Minute Deal Analysis Checklist

✅ Use the 1% Rule
✅ Estimate Cap Rate
✅ Calculate Cash-on-Cash Return
✅ Check DSCR if financing with a rental loan
✅ Use online tools for rent comps, ARV, and renovation costs
✅ Ask your lender, broker, or contractor for quick verifications

Want a downloadable graphic or printable cheat sheet of this process?
Let me know and I’ll create one for you!