Understanding Deal Scoring: What Makes a 10 Out of 10 Deal

Every deal looks good to someone. The question is whether it looks good to the math.

ARV Analyzer scores every deal on a 0-10 scale using five weighted factors. Here's what each one means and why it matters.

The Five Scoring Factors

1. Spread (30% weight)

The spread is the gap between what you're paying and what the property is worth after repairs. It's the most heavily weighted factor because it directly determines profit potential.

• 8-10: Spread exceeds 35% of ARV
• 5-7: Spread is 20-35% of ARV
• 0-4: Spread is below 20% of ARV

2. ARV Confidence (20% weight)

How reliable is the ARV estimate? This is based on the quantity, proximity, recency, and similarity of comparable sales.

• 8-10: 5+ strong comps within 0.5 miles, sold in last 6 months
• 5-7: 3-4 comps within 1 mile, sold in last 12 months
• 0-4: Fewer than 3 comps or comps are weak matches

3. Risk Level (20% weight)

How many red flags does the property have? Foundation issues, flood zones, environmental concerns, age-related problems.

• 8-10: No significant risk flags
• 5-7: 1-2 manageable flags with known costs
• 0-4: Multiple serious flags or unknown risk exposure

4. Rehab Feasibility (15% weight)

Is the rehab scope reasonable relative to the potential return? A $100,000 gut rehab on a $200,000 ARV property is a different proposition than on a $500,000 ARV property.

• 8-10: Rehab is under 20% of ARV (cosmetic on a high-value property)
• 5-7: Rehab is 20-40% of ARV
• 0-4: Rehab exceeds 40% of ARV

5. Exit Flexibility (15% weight)

How many viable exit strategies does the deal support? Deals that work for flips AND BRRRR AND rentals are safer than one-trick deals.

• 8-10: All three exit strategies show positive returns
• 5-7: Two strategies work well
• 0-4: Only one exit is viable (or none)

Score Ranges

• 8-10 (Excellent): Strong buy. Multiple exits, high confidence, low risk.
• 6-7 (Good): Worth pursuing with due diligence. Minor concerns to address.
• 4-5 (Fair): Marginal deal. Proceed only if you have a specific edge.
• 0-3 (Poor): Pass. The numbers don't support this deal.

Key Takeaways

• Deal scoring removes emotion from investment decisions
• Spread is the most important factor (30% of the score)
• High ARV confidence means you can trust the numbers
• The best deals score well across all five factors
• A score of 7+ is your target for consistent profitability