How We Calculate Our Cash Offer: The Math Behind Every Number

Home › How We Calculate Our Offer · Updated October 25, 2026

Most sellers who request a cash offer have the same unspoken question: where did that number come from? Too often the answer is a single figure on a text message with no explanation, which makes it impossible to tell whether the offer is fair, careless, or designed to be renegotiated later. We think you deserve better than that, and we think a transparent method is the best argument for working with us.

This page lays out the formula we use for houses, explains how we estimate each input, walks through a fully worked example with clearly labeled hypothetical numbers, and then compares that example with what the same owner might net by listing. It also covers the Southwest Florida factors that push an offer up or down, and why two cash buyers looking at the same property can land tens of thousands of dollars apart.

If you want to run your own numbers while you read, open our net proceeds calculator to compare a listing with a cash sale, and our repair cost estimator to build a low-to-high repair range for your home.

What You Get with a Written, Itemized Offer

The Formula in One Line

For a house we intend to renovate and resell, the method looks like this:

Every serious renovation buyer uses some version of this formula; the differences lie in how carefully each input is measured. Some investors shortcut the whole thing with a fixed percentage of value, a rule of thumb you may have heard of. Rules of thumb are fast, but they can’t tell a 2004 roof from a 2021 roof or a sewer-connected lot from one facing an assessment, and in Southwest Florida those details can swing a number dramatically. We build the number from the parts instead.

For rentals we plan to hold, and for commercial property, the starting point is different: income. We look at rents, expenses and the property’s net operating income, and value it the way an income buyer would. Our commercial property page and multifamily page explain that approach. The rest of this page focuses on houses.

Step 1: After-Repair Value from Comparable Sales

After-repair value, or ARV, is our estimate of what your home would sell for on the open market once the repairs on our list are finished. It is not a guess at today’s as-is value, and it is not an automated estimate from a website.

How we choose comparables

• Closed sales, not asking prices. Listings tell you what sellers hope for; closings tell you what buyers paid.
• Recent. We prefer sales from roughly the last three to six months and widen the window only when the neighborhood has few sales, explaining why when we do.
• Close by and similar. Same neighborhood or a truly comparable one, similar size, bedroom and bath count, lot type, age and construction.
• Same features that matter here. In Southwest Florida that means pool versus no pool, gulf-access canal versus freshwater canal versus dry lot, flood zone, elevation, and whether the home is on city sewer and water or a septic system and well.
• Renovated condition. Because ARV assumes the work is done, we compare to homes that sold in the condition we plan to deliver, then adjust for differences.

Adjustments and judgment

No two homes are identical, so we adjust comparables for differences in size, a garage, a pool, waterfront type and similar features. When the adjustments get large, that is a sign the comparable isn’t very comparable, and we look for better ones. We would rather use three strong comparables than ten weak ones.

What you can do

Ask us for the addresses of the sales we used. If you or an agent you trust has better comparables, send them; good information changes our number. For context on how this differs from a full listing valuation, see our cash offer vs. listing guide.

Step 2: The Repair Estimate, from a Contractor’s Point of View

The repair estimate is where cash offers most often go wrong, in both directions. Underestimate it and the buyer comes back later asking for a price cut. Overestimate it and the seller gets a needlessly low offer. Because our team includes licensed Florida contractors, we price repairs the way a builder would: by scope, by permit, and by the order the work has to happen.

What goes into the estimate

• Insurability items first. Roof, electrical panel, plumbing supply lines and water heater age drive whether a buyer can insure the home, so they are usually non-negotiable in our scope.
• Systems. HVAC, ductwork, water heater, septic or sewer lateral, well equipment and pool equipment.
• Envelope. Windows and doors (impact-rated where it makes sense), stucco cracks, soffits and fascia, and any water intrusion.
• Interior finish. Kitchen, baths, flooring, paint, doors and trim, lighting and fixtures, finished to the level the comparables were finished.
• Permits and code. Permit fees, inspections, and the cost of resolving open or expired permits or unpermitted work. See our page on code violations and unpermitted work.
• Contingency. A percentage for what nobody can see before walls and floors are opened: rotted subfloor, hidden termite damage, failed drain lines. We show the contingency as its own line so you can see its size.

Why we don’t simply quote retail repair prices

A homeowner hiring individual trades for a one-time project usually pays more per item than a buyer that renovates regularly and coordinates its own crews. We use realistic costs for our own work, which generally means our repair line is lower than what you’d be quoted as a homeowner. That difference benefits your offer. It is also why we encourage you to get your own contractor bids if you’re thinking of fixing the house yourself before listing.

Step 3: Holding Costs While the Work Gets Done

From the day we close until the day we resell, we own the property and carry its costs. Holding costs are easy to overlook and add up quickly, so we estimate them month by month for a realistic timeline: permitting, construction, listing and the buyer’s closing period.

• Property taxes, prorated for the months we expect to own the home. Florida homestead protections end with a sale, so we budget for taxes based on what a non-homestead owner would pay.
• Insurance. Insuring a vacant home under renovation, often under a builder’s risk or vacant-dwelling policy, can cost more than a standard homeowner’s policy. Flood insurance is added where needed.
• Utilities for power, water and sewer, lawn care and pool care during the project.
• HOA or condo dues and any special assessments that come due while we own it. Our page on condo special assessments covers how those are handled at closing.
• Cost of capital. Money tied up in a property has a cost, whether it is borrowed or our own. We include it so the offer reflects the real expense of carrying the project.

Step 4: Closing and Resale Costs

A renovation buyer pays closing costs twice: once when it buys from you and again when it sells to the next owner. We typically pay normal closing costs on our purchase, so those come out of our side of the equation rather than your proceeds. On the resale we budget for the costs any seller faces.

• Resale commission paid to listing and buyer’s agents when the renovated home is sold.
• Buyer concessions such as closing-cost credits, which are common with financed buyers.
• Documentary stamp tax on the deed, which in Florida is $0.70 per $100 of the sale price in every county except Miami-Dade, which has a different rate structure.
• Title insurance and settlement fees for both transactions, plus recording fees.

Step 5: The Risk Margin, and Why It Exists

The last subtraction is our margin. It covers the risk that values soften before we resell, that repairs run over even with a contingency, that a storm season disrupts the schedule, or that insurance costs rise. It is also how a business that takes those risks stays in business. We don’t hide it inside other numbers. Larger, longer or more uncertain projects carry a larger margin; simple projects with predictable resale carry a smaller one.

The margin is also where the trade-off between price and certainty lives. When you sell to us, you hand over the repair risk, the market risk and the time. A listing keeps all of those with you, which is why a listing can net more when everything goes to plan.

A Worked Example (Hypothetical Numbers)

Imagine an inland 1990s concrete-block, three-bedroom, two-bath pool home of about 1,650 square feet in a Lee County neighborhood on city water and sewer. It is structurally sound but has a shingle roof near the end of its life, an aging air conditioner, original kitchen and baths, worn flooring, and a pool surface that needs refinishing. Assume three strong comparable sales of renovated homes nearby support an after-repair value of $380,000.

Notice what the example shows. About 20% of the after-repair value goes to repairs and contingency, about 13% to holding, closing and resale costs combined, and 10% to margin. A home that needs less work would see a higher offer relative to its value; a home with structural, flood or permitting problems would see a lower one.

The Same House: Our Cash Offer vs. Listing It

An offer only means something next to the alternatives. Below, the same hypothetical owner from the example compares three paths: renovating and listing, listing as-is, and selling to us. The owner has no mortgage to keep the math simple; a payoff would come out of every column equally. All figures are hypothetical, and title and settlement costs are shown as estimates because who pays which costs varies by county custom and by contract.

In this hypothetical, renovating and listing nets roughly $40,000 more than our offer, and listing as-is nets roughly $16,000 more, if everything goes as planned. That is an honest outcome, and it happens. Owners who have the time, the cash for repairs, the tolerance for managing contractors and an insurable house often do better on the open market. Our offer tends to make sense when one or more of those pieces is missing: there’s no money for an $85,000 renovation, the roof makes the home hard to insure for a financed buyer, the house is inherited and far away, the timeline is short, or the owner simply values a fixed date and a fixed number. You can rerun this comparison with your own numbers in our net proceeds calculator.

What Moves the Number in Southwest Florida

Southwest Florida homes have features that rarely matter as much elsewhere. These are the ones most likely to move an offer from us or from any careful buyer.

Flood zone and elevation

A home in a FEMA special flood hazard area usually needs flood insurance for a financed resale, which affects the buyer pool and the after-repair value. If the home was damaged, FEMA’s substantial-damage rule can require a home whose repair cost reaches 50% of its market value to be brought into compliance with current floodplain rules, which can mean elevation or demolition. An elevation certificate, if you have one, helps us price accurately. Our hurricane and flood damage page goes deeper.

Roof age and insurability

Florida law says an insurer may not refuse to issue or renew a homeowner’s policy solely because a roof is less than 15 years old, and for roofs 15 years or older the homeowner may obtain an inspection; if it shows at least five years of remaining life, age alone can’t be the reason for refusal (section 627.7011(5), Florida Statutes). In practice, an older roof often still means an inspection, a higher premium or a replacement requirement. A newer roof with a permit on file can raise our offer meaningfully. Our page on roof and insurance problems explains the issue for sellers.

Seawalls, docks and canals

On Cape Coral, Punta Gorda and other canal homes, the seawall’s condition can matter as much as the house. A cracked or leaning seawall, a failing cap or a damaged dock is an expensive, permitted repair. Gulf access versus freshwater canal, bridge clearances and travel time to open water all affect value too.

Septic, wells and utility assessments

Homes on septic and well need those systems evaluated. Some areas, including parts of Cape Coral and North Port, have been converted or are scheduled for conversion from septic to central sewer, which can bring assessments and connection costs. A paid-off assessment or a recent septic inspection removes uncertainty and can lift the number.

Permits and unpermitted work

Enclosed lanais, garage conversions and additions without permits are common. We price the cost of permitting after the fact, or removing the work. Open or expired permits on file with the city or county can also hold up a closing until resolved.

Older plumbing and electrical

Polybutylene supply lines, cast-iron drains and certain older electrical panels can prompt insurance underwriting problems, so they appear as specific line items in our scope.

Condos and HOAs

For condominiums, the building’s milestone inspection status, reserves and any special assessments matter. For HOA communities, approval requirements, dues and rental restrictions can change who will buy and at what price.

Factors that raise an offer

• A permitted roof less than 15 years old, impact windows or shutters, and a newer HVAC system.
• A home on city sewer and water, or with assessments already paid.
• Clean permit history and no code cases.
• Vacant at closing, or tenants with clear leases.
• Flexibility on the closing date.

Why Two Cash Offers on the Same House Can Differ

It is common for a seller to receive cash offers tens of thousands of dollars apart. That doesn’t automatically mean one buyer is dishonest. Usually it means they made different assumptions, and you can find out which by asking each buyer to show its math.

• Different comparables. One buyer may value your home from fully renovated sales, another from dated ones, or one may include waterfront sales that don’t really match a dry lot.
• Different repair scopes. One buyer plans a new roof and full repipe; another plans paint and carpet and hopes the inspector doesn’t notice. The second number is higher today and more likely to shrink later.
• Different business models. A buyer who will assign your contract to someone else needs room for its own fee and the end buyer’s profit. A landlord who will hold the home as a rental values it on rent rather than resale. National programs may price centrally from data models. Our comparisons with iBuyers and national we buy houses franchises describe those models.
• Different costs of capital and timelines. Buyers who borrow at high rates or plan slower projects carry more holding cost.
• Different strategies. Some offers are high on purpose, with a long inspection period and a plan to renegotiate. Our guide to we buy houses scams explains how to recognize that pattern.

The best way to compare is to put each offer on the same footing: the price, the closing date, the deposit and who holds it, the inspection period, who pays which closing costs, and whether the buyer will close in its own name. A slightly lower number with a short inspection window and a firm deposit can be worth more than a higher number with neither.

How We Show Our Math in Writing

When we send you an offer for a house, you can ask for the worksheet behind it. It lists the after-repair value and the comparable sales supporting it, our repair scope by line item with a contingency, our holding-cost assumptions, our closing and resale cost estimates, and our margin. If we revise the offer after seeing the property in person, we tell you which line changed and why. If you disagree with a line, tell us. Sometimes you know something we don’t, like a roof permit from last year or a septic inspection, and the number goes up.

How to Get Your Itemized Offer

1. Tell us about the property. Use the form on this page or call (239) 686-0823. The address, approximate condition, roof and system ages, occupancy and any known issues are enough to start.
2. We run comparables and a preliminary scope. Usually within 24–48 hours we can share a preliminary range and what it depends on.
3. We walk the property. A short visit lets our contractor-led team confirm the scope. We’ll explain any change from the preliminary number.
4. You get a written offer and choose your date. Closing happens at a licensed Florida title company, in as little as 7–14 days when title is clear, or on your timeline. Our how it works page has the full process.

Related Pages

• Sell my house fast in Florida
• Single-family homes
• Condos and townhomes
• Houses needing major repairs
• Inherited and probate homes
• Facing foreclosure
• Southwest Florida service area
• Cape Coral
• Fort Myers
• Creative financing options

Frequently Asked Questions about How We Calculate Our Offer