Fast underwriting kills bad deals before they eat your calendar. Here's the exact workflow.
Minute 0–3: Rent
- Pull actual rent (Rentometer, local listings, PM friends).
- Use actual current lease if leased, or conservative market rent.
- SFR: aim for 0.8–1.2% of purchase price / month in landlord-friendly markets.
Minute 3–5: Taxes and insurance
- Look up the tax assessment on the county site. Reassess to sale price — many jurisdictions bump taxes on transfer.
- Grab a quick insurance quote — $1,200–3,000/yr on SFR depending on state.
Minute 5–8: OpEx normalization
Model these:
- Vacancy: 5–8%.
- Management: 8–10% (even if self-managing).
- R&M: 5–8%.
- CapEx reserve: 5–8%.
- Taxes + insurance (from above).
Total OpEx typically 35–50% of gross rent on SFR.
Minute 8–10: Rate + payment
- Grab today's DSCR rate (typically 7.5–8.5% in 2026).
- Calculate PITI at 25% down.
Minute 10–12: DSCR + cash-on-cash
- DSCR = NOI / Debt Service. Skip if under 1.10.
- CoC = Annual Cash Flow / Cash Invested. Skip if under 6%.
Minute 12–15: Stress test
Model:
- 90% occupancy instead of 95%.
- Rate 100 bps higher.
- OpEx +15%.
If DSCR still ≥ 1.00 under stress, you have a real deal.
Kill criteria
- Negative cash flow at current rates.
- OpEx > 55% without a clear reason.
- Comps < 3 sold in last 6 months.
- Rent-to-price < 0.6%.
If any two are true, move on.