How Does a Cash Buyer Run the Numbers on a Louisville House?

In June it took me about 24 minutes to run the numbers on a house. By September it was about 6.

Same guy, same kind of Louisville houses. What changed is that the steps finally talk to each other. I think my numbers are better for it, and if you're thinking about selling a house to someone like me, that's worth knowing about.

When I look at a house, I'm answering one question: what can I pay for it and still do the job right?

I start with comps, the recent sales of similar houses nearby, to figure out what the house would be worth fixed up. Investors call that the ARV, short for after-repair value. I wrote a longer piece on how it works and how to work backward from it. Then I rough out the rehab, meaning what the house needs and what it doesn't. Then comes the offer math: the fixed-up value, less the repairs, less what it costs to hold and sell the house, less some room for the surprises every house has. When I'm done, it gets saved as a written analysis on that house.

Investors call that underwriting. Every buyer does some version of it. The difference is how carefully.

Every step lived somewhere different. I'd pull comps in one place, rough out the rehab in another, and run the offer math somewhere else. Then I'd spend a good bit of my time making sure it all agreed.

On a busy afternoon, with calls stacking up, that's when a guy gets tempted to eyeball a house instead of running it. I did my share of eyeballing.

I set it up so the steps hand off to each other. The comps, the rehab, and the offer math now land in one saved analysis. AI does the stitching. It pulls the pieces together and lays them out so I can read the whole house on one page.

Then I look at it, push on it, and make the call. The number is mine.

It makes me consistent. Every house goes through the same process, whether it's my first look of the day or the last one before dark.

It checks the flood zone so I don't forget. That's easy to skip on a busy afternoon, and it can change what a house is worth and who can buy it.

It always gets me a triangulated ARV. That means the fixed-up value gets worked out more than one way and checked against itself, so I'm not leaning on one gut number.

And it always lays out every exit option. I could fix it up and sell it, do a lighter fix and sell it, pass the contract to another investor, or keep it as a rental. I see all of them before I pick one.

For me it went the other way. Because it's quick now, just about every house I look at gets a written analysis, even the ones I'd have eyeballed on a busy afternoon a year ago.

I think my underwriting's better for it. When doing it right only costs a few minutes, I don't skip it.

It means the number I give you has something written behind it. If you want to know how I got there, ask me. I'll walk you through the sales I compared your house to and the repairs I'm counting.

It also means I can see plainly when a house doesn't need me. If yours is in good shape and you've got time, listing it with a good agent may bring you more, and I'll tell you so. That's an easier call to make when the numbers are sitting right there on one page.

AI puts the pieces together and writes it up. It doesn't walk the house, and it doesn't decide what I pay. I still go see it. I still ask the seller what they know about the house that I can't see from the driveway.

The repair side runs on my own costs through a fixed pricing engine, the same way every time. I wrote about that in what a cosmetic rehab costs in Louisville.

How long does it take a cash buyer to come up with an offer? It depends on the buyer. For me the number-crunching takes a few minutes now. Seeing the house and talking with you take longer, and they should.

Is a quick offer a lowball offer? Speed doesn't set the price. The comps, the repairs, and the cost of holding and selling the house do. A written analysis lets you see each of those.

Does AI decide what you'll pay for my house? No. It lays the pieces out for me. I make the call, and I'm the one you'll talk to.

What would you want to see behind an offer on your house before you'd trust it?