In this new solo series of Burning the Ships, I’m shifting from weekly rambles to tactical deep dives and today we’re kicking off with how to underwrite a single-family fix and flip deal.
I walk through the full process step by step: from defining your goals, to calculating ARV (After Repair Value), to backing into your Max Allowable Offer. We break down the often-overlooked holding costs, closing costs, and realtor commissions that can kill your margins if you don’t account for them.
But this episode isn’t just about math, it’s about discipline. Because the hardest part of underwriting isn’t the numbers, it’s sticking to them when your emotions want the deal to work.
Whether you’re an investor or just someone looking to sharpen your mindset, this episode will give you a framework for discipline that applies far beyond real estate.
Key Talking Points of the Episode
00:00 Introduction
02:26 Mindset nugget preview: discipline is the glue to success
03:33 JJ’s Joke of the Week
05:13 Why principles of underwriting haven’t changed in decades
06:46 Step 1: Define your goal—profit target and purpose
07:50 Step 2: Force appreciation—renovating to increase value
09:20 ARV (After Repair Value): why it’s the cornerstone metric
10:23 How to calculate the MAO (Maximum Allowable Offer)
11:38 Back-of-the-napkin math formula and following the 70% rule
13:13 Understanding closing costs on front and back end
14:37 Holding costs: utilities, insurance, taxes, lawn care
17:22 Realtor commissions: 5–6% adds up fast
19:10 Why conservative underwriting creates buffer for unknowns
22:09 Running comps: Zillow, Redfin, Realtor.com, or CMAs
24:15 Why you need to get extra conservative with rural or unique properties
27:33 Rehab estimates: why you need a contractor’s expertise
31:16 Common mistakes: overestimating ARV & underestimating repairs
33:07 Full deal example: breaking down numbers on a Newport News property
38:11 Transition to mindset: discipline in underwriting
39:41 Discipline means sticking to your Max Allowable Offer
42:43 Why motivation fades but discipline sustains long-term success
44:41 How discipline builds reliability, trust, and reputation
49:21 Where can you add value today?
Quotables
“The hardest part of underwriting isn’t the math—it’s the discipline to stick to it.”
“Motivation is fleeting. Discipline is what sustains success over time.”
“If you’re not disciplined in underwriting, emotions will push you into bad deals.”
Links
608B Capital
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