Before I go deep on comps, rehab line items, or exit strategy, I’ve been tightening up how I screen deals on the front end.
Lately, instead of anchoring on a single ARV or best-case rehab, I've been pressure-testing deals using: ARV ranges (low / mid / high instead of one number) Rehab bands (cosmetic vs moderate vs heavy) Explicit known vs unknown risks (interior access, occupancy, title, etc.) A downside-first read before thinking about upside
The goal isn’t to kill deals — it’s to avoid forcing numbers or chasing something that only works on best-case assumptions.
Curious how others here handle early-stage deal strategy: What’s your first filter before you decide a deal is worth serious time?
I always start with my financing strategy. Right now, cost of capital is the biggest obstacle to a profitable deal (both on the acquisition and the exit).
Great question. The ranges and downside cases are underwriting, so my first filter is what I check before I give a deal an hour of my life.
Coming from multifamily, I start with data + truth: can I get a rent roll/T12 (or at least consistent basics) and does the story actually match what's being shown? If the info is missing or keeps changing, I assume it'll be a time sink.
Next is a quick pricing sniff test: does this feel priced like a stabilized asset already, or priced like a real problem? I’m not doing deep comps yet, just making sure I’m not about to “model my way into” a thin deal.
Then I look for any loud deal-killers that a spreadsheet won’t fix (bad pocket, major deferred-maintenance signals, insurance/tax landmines, chronic occupancy/collection issues). If it passes those, then it’s worth the deeper comps/rehab/exit work.
One of my first filters is asking, "What would have to go wrong for this deal not to work?" It's easy to get excited about the upside. I find it more useful to look at the downside first and see how much margin for error exists.
If a deal only works with the highest ARV, the lowest rehab budget, and a smooth exit, I usually lose interest pretty quickly. The deals I like best tend to work across a range of outcomes, not just the best one.