Six-step deal file
From buy box to buy-or-pass
01
Write the buy box before you browse
Set a price ceiling, minimum monthly cash flow, target cap rate, financing assumptions, property type, and geographic boundary. A written buy box keeps attractive photos from moving the goalposts.
Output: one sentence that makes a listing an automatic yes, no, or investigate.
02
Search markets where the rent-to-price relationship can work
Start at ZIP level. Compare asking prices with realistic rent ranges, taxes, insurance, vacancy, and management costs. Citywide averages can hide the block-level spread that makes or breaks a rental.
Output: a short market list, not a nationwide pile of tabs.
03
Screen listings with the same assumptions
Calculate every candidate with one expense framework. Use cash flow for monthly durability, cap rate for unlevered yield, DSCR for debt coverage, and cash-on-cash return for the yield on your invested cash.
Output: an apples-to-apples shortlist.
04
Verify rent and operating costs
Check comparable rents, unit condition, concessions, property tax, insurance, utilities, maintenance, management, and likely capital work. Treat an optimistic input as a risk to resolve, not free upside.
Output: a base case and a conservative case.
05
Stress-test the financing
Raise vacancy and expenses, lower rent, and test the actual interest rate and down payment. If the deal works only in the best case, it has not passed underwriting.
Output: the conditions under which the deal stops working.
06
Save the evidence and decide
Keep the listing, assumptions, comps, notes, and result together. A good deal file lets you explain why you offered, passed, or changed price without reconstructing the analysis later.
Output: a defensible buy-or-pass decision.