First Time Trying to Underwrite a Deal — Feeling a Bit in Over My Head

Knoxville, Tennessee
General Real Estate Investing
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First Time Trying to Underwrite a Deal — Feeling a Bit in Over My Head

Joey Stephens
Member since 2025 · 1 post · 2 votes

Hey everyone,

I’m trying to take the first real step toward buying my first investment property, but I’m hitting a wall trying to properly underwrite the numbers. I’ve watched the videos, downloaded a few calculators, and run some scenarios — but honestly, I still don’t feel confident I’m doing it right.

I’m not afraid of work, risk, or renovations… I’ve renovated countless investment properties for other people over the years and have a solid group of subs for everything on that side of things. But when it comes to the financial side of investing — underwriting, strategy, long-term planning — I feel completely bankrupt.

I know what it takes to bring a house back to life, but I’ve never bought one with the math first. This side of it feels like a different language.

If you’ve been where I am and figured it out, I’d seriously appreciate any advice, resources, or just a gut check. I’m trying to do this right and stay honest about what I don’t know.

Thanks in advance — looking forward to learning from you all.

– Joey

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  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    1y

    Did you see this house in person? If so, good job. If not, go back to square one.

    Since you have experience, you are likely falling into the trap of overthinking based on your lack of confidence with the financial projection part of the deal, but it's not as important as your knowledge.

    You need to know the true value of the target, the potential ARV, and you already know the rehab costs. There isn't much more to it than that. Holding costs matter, process matters, but the asset and what you can get it for is what makes you money in the end, especially since you should know the reno costs.

    You don't buy single-family houses with math, that's for commercial properties and large-scale. When rates are high like this, the math doesn't math. You have to know the local area and market and understand the renovation and expectations of your end buyer and whether you can meet them.

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  • Bryce JamisonPro Member
    Rental Property Investor · Mebane, NC · Member since 2015 · 493 posts · 439 votes
    1y

    If you're struggling with general personal finance, Dave Ramsey is a great place to start. I think the BP community would agree on his first 3-4 baby steps. From there we differ because folks here overwhelming use leverage to buy properties.

    I'm a huge fan of the BP Rental Property Calculator. If you don't trust the numbers over estimate interest rate, expenses, and vacancy, and underestimate rent. If a property pencils out in a worst case scenario you can feel confident it will work in an average scenario.

    I'm also a huge evangelist for having a massive emergency fund. The bigger it is, the less concerns you have. To be hyperbolic, if you had 10M in the bank would you be nervous to buy a 250-300K house? Maybe putting more in your emergency fund will help you take the first step.

    I imagine one of the people you've done renovations for would also be willing to help guide you.

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  • Cory KingBusiness Member
    Real Estate Agent · Knoxville, TN · Member since 2021 · 164 posts · 77 votes
    1y
    Quote from @Joey Stephens:

    Hey everyone,

    I’m trying to take the first real step toward buying my first investment property, but I’m hitting a wall trying to properly underwrite the numbers. I’ve watched the videos, downloaded a few calculators, and run some scenarios — but honestly, I still don’t feel confident I’m doing it right.

    I’m not afraid of work, risk, or renovations… I’ve renovated countless investment properties for other people over the years and have a solid group of subs for everything on that side of things. But when it comes to the financial side of investing — underwriting, strategy, long-term planning — I feel completely bankrupt.

    I know what it takes to bring a house back to life, but I’ve never bought one with the math first. This side of it feels like a different language.

    If you’ve been where I am and figured it out, I’d seriously appreciate any advice, resources, or just a gut check. I’m trying to do this right and stay honest about what I don’t know.

    Thanks in advance — looking forward to learning from you all.

    – Joey


     Hey Joey

    Totally feel you on this. It's taken lots of practice but I'm confident in the framework we've developed for under writing deals. Gimme a shout. I'm in Knoxville too

    0Reply
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