The Problem With Traditional Deal Analysis
Most investors spend hours building spreadsheets for deals that were never worth pursuing in the first place. The traditional approach — calculate everything, then decide — wastes time on bad deals and creates analysis paralysis on good ones.
The Deal Score method flips this logic: get a quick 0–100 score first, then deep-dive only on deals that pass the threshold.
What Is a Deal Score?
A Deal Score is a composite metric that translates the most important financial indicators of a property deal into a single number between 0 and 100:
| Score | Grade | What It Means |
|---|---|---|
| 80–100 | Excellent | Strong returns, low risk, pursue immediately |
| 60–79 | Good | Solid deal, worth detailed analysis |
| 40–59 | Fair | Marginal — negotiate harder or walk away |
| 0–39 | Weak | Poor risk/reward, avoid unless fundamentals change |
How Deal Score Is Calculated by Strategy
Fix & Flip
For house flipping, the Deal Score weighs three factors:
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Annualised ROI (50% weight) — The most important metric. A 30% annualised ROI scores near the top; below 10% scores poorly.
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Profit Margin (30% weight) — Net profit as a percentage of ARV. The 70% Rule implies a minimum 20–25% margin after all costs.
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Project Duration (20% weight) — Shorter projects score higher. A 6-month flip scores better than an 18-month renovation.
Example: A property with 28% annualised ROI, 22% margin, and 8-month duration scores approximately 74/100 (Good).
BRRRR Strategy
For Buy-Rehab-Rent-Refinance-Repeat, the score focuses on capital efficiency:
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Cash-on-Cash Return (40% weight) — Annual cash flow divided by cash invested. Above 12% is excellent.
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Equity Recycled (40% weight) — The percentage of your initial capital recovered through refinancing. 100% means you’ve pulled all your money out.
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DSCR (20% weight) — Debt Service Coverage Ratio. Above 1.25 means the rent comfortably covers the mortgage.
Example: A deal with 9% cash-on-cash, 85% equity recycled, and DSCR of 1.3 scores approximately 88/100 (Excellent).
Rental Yield
For buy-to-let properties, the score measures income quality:
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Net Yield (50% weight) — Net annual rent divided by purchase price. Above 6% is strong in most European markets.
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Cash-on-Cash Return (30% weight) — Actual cash return on the equity invested, after mortgage payments.
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DSCR (20% weight) — Ensures the property is self-financing.
Example: A property with 5.8% net yield, 7% cash-on-cash, and DSCR of 1.2 scores approximately 61/100 (Good).
Benchmarks by Country
What constitutes a “good” deal varies significantly by market:
| Country | Minimum Net Yield | Target Net Yield | Notes |
|---|---|---|---|
| Portugal | 4.0% | 5.5–6.5% | Porto and Lisbon yields compressed |
| Spain | 3.5% | 5.0–6.0% | Regional variation is high |
| Germany | 3.0% | 4.5–5.5% | Strict rent controls in major cities |
| France | 3.5% | 4.5–5.5% | High notary costs affect returns |
| UK | 4.5% | 6.0–7.5% | Northern cities offer higher yields |
| USA | 5.0% | 7.0–9.0% | Varies enormously by metro |
The PropCalc Smart Insights engine automatically adjusts these benchmarks based on your selected country, so you always see alerts calibrated to your market.
How to Use Deal Score in Practice
Step 1: Quick filter. Enter the purchase price, estimated ARV (or rent), and rough rehab cost. Check the Deal Score. If it’s below 40, move on.
Step 2: Optimise. If the score is 40–60, try adjusting the purchase price or rehab budget. The score updates in real time, so you can see exactly what price makes the deal viable.
Step 3: Deep dive. For scores above 60, complete the full analysis — financing details, holding costs, tax implications — and review the Smart Insights alerts.
Step 4: Negotiate. Use the Deal Score as a negotiation anchor. If a 70/100 deal requires a purchase price of €180,000 but the seller is asking €210,000, you have a clear, data-driven argument for your offer.
Common Mistakes to Avoid
Ignoring the annualised ROI. A 30% total ROI sounds great — but if it takes 3 years, that’s only 10% per year, which barely beats a savings account.
Overestimating ARV. The After-Repair Value is the most optimistic number in any flip analysis. Use comparable sales from the last 90 days, not 12 months.
Underestimating rehab costs. Add a 15–20% contingency buffer. Experienced investors know that surprises are not the exception — they’re the rule.
Ignoring holding costs. Every month you hold the property costs money: mortgage interest, insurance, utilities, council tax. A 6-month project with high holding costs can score 20 points lower than a 3-month project with the same gross profit.
Try It Now
The Deal Score is built into three PropCalc calculators:
- Fix & Flip Calculator — for house flipping deals
- BRRRR Calculator — for buy-rehab-rent-refinance-repeat strategies
- Rental Yield Calculator — for buy-to-let properties
All three are free, require no sign-up, and update in real time as you type.