Eluvial Academy

Deal Screening Checklist

Run every rental or small development deal through these checks before you pay for inspections, appraisals or legal review. If a deal fails a hard test, walk away early.

Learn the method

1 · Market

  • Population and job growth are flat or rising over the last 5 years.
  • Rent for this unit type is confirmed with at least 3 recent comparable listings or leases.
  • Days on market and vacancy are known for the submarket, not just the metro.
  • Zoning allows your intended use, including any ADU or added units.

2 · Property

  • Roof, HVAC, water heater, electrical panel and foundation ages are noted.
  • Repair budget is written line by line, plus a 10–15% contingency.
  • Flood zone, insurance quote and property tax after reassessment are confirmed.
  • After-repair value (ARV) comes from sold comps within about 6 months, not list prices.

3 · The numbers

  • NOI = rent − vacancy − all operating expenses (taxes, insurance, repairs, management, reserves). No debt.
  • Cap rate = NOI ÷ price. Compare it to recent sales of similar properties.
  • DSCR = NOI ÷ annual debt service. Most lenders want 1.20–1.25 or higher.
  • Cash-on-cash = annual cash flow ÷ total cash invested. Know your minimum before you look.
  • The deal still cash-flows with rent 10% lower and the rate 1 point higher.

4 · Financing

  • Loan type, rate, term, points and down payment are quoted in writing.
  • Reserves cover at least 6 months of the mortgage payment and expenses.
  • Closing costs and the first-year repair budget are funded, not hoped for.
  • You know who signs the guarantee and what happens if the deal underperforms.

5 · Due diligence

  • Inspection, title search and survey are ordered with contract contingencies to match.
  • Existing leases, rent roll and deposits are verified against bank statements.
  • Permits for past work are checked with the city or county.
  • Your attorney or agent has reviewed the contract terms and deadlines.

6 · Exit

  • You have a primary exit (hold, refinance or sell) and a backup.
  • The refinance works at today's rates and a conservative appraisal.
  • Hold period, target return and the point where you'd sell are written down.

Your verdict

Build · passes every hard test with room to spare. Move to due diligence.

Hold · close on one test. Renegotiate price or terms, then re-screen.

Busted · fails a hard test. Walk away, or change the plan and start over.

Screen a real address in seconds with Build or Busted, then learn the full method in Single-Family Investment Strategies.