How I underwrite a wholesaler deal in 10 minutes

Question

Most wholesalers send me the same thing: an address, an asking price, and "great deal, won't last." I've got 10 minutes to decide. Here's the exact screen I run:

1. ZIP first. If it's not one of my 9 Memphis ZIPs — 38109, 38111, 38112, 38114, 38116, 38117, 38118, 38122, 38128 — I'm done in 30 seconds. My contractors, my comps, and my Section 8 rents all live in those ZIPs. Outside them I have no edge.

2. Beds and baths. 3BR+ gets my attention. A 2/1 only works if I can see the path to a 3/1 — adding a bedroom is the highest-ROI move I know.

3. The four numbers. Asking price, rehab estimate, ARV, rent. I need all four or I'm not moving. My buy box: buy under $100K, ARV $180K–$265K, Section 8 rents $1,395–$1,950 for 3BR+. And it has to pass the 1% rule — monthly rent at least 1% of my all-in cost.

4. The comp check. Sold comps only, last 6 months, within about half a mile, similar bed/bath count. I never trust Zillow's estimate. If I can't verify ARV in five minutes, I pass.

5. The offer math. My price is whatever makes the refi work — DSCR at 70–80% LTV, with real cash flow left over. And I never put earnest money down. If that kills the deal for the wholesaler, it wasn't my deal.

Out of 20 deals, I chase maybe two. The other 18 get a fast no — which is exactly why wholesalers keep sending me deals. I never waste their time.

What's your fastest kill rule? What's the one thing that makes you say no in under a minute?

Muyees Ayilara · Answer

James, this is exactly how it should be done. I respect the discipline in this.

I see it from the lending side, and your screen saves both of us time. When a wholesaler sends me a deal with no rehab number, no ARV, and no rent, I already know I cannot underwrite it.

My fastest kill is the same as your number 4. If I cannot verify the ARV with sold comps in the last 6 months, within half a mile, same bed and bath count, I pass. I do not use Zillow either.

The second kill for me is the refi math. If the all-in cost does not work at 70-80% LTV with real cash flow left over, it does not matter how good the wholesale price looks. The deal has to work after the refi, not just at purchase.

I like your rule on the 2/1 to 3/1 too. That is where a lot of investors leave money on the table.

Out of 20 deals, chasing 2 is about right. The fast

Muyees Ayilara · Answer

James, this is exactly how it should be done. I respect the discipline in this.

I see it from the lending side, and your screen saves both of us time. When a wholesaler sends me a deal with no rehab number, no ARV, and no rent, I already know I cannot underwrite it.

My fastest kill is the same as your number 4. If I cannot verify the ARV with sold comps in the last 6 months, within half a mile, same bed and bath count, I pass. I do not use Zillow either.

The second kill for me is the refi math. If the all-in cost does not work at 70-80% LTV with real cash flow left over, it does not matter how good the wholesale price looks. The deal has to work after the refi, not just at purchase.

I like your rule on the 2/1 to 3/1 too. That is where a lot of investors leave money on the table.

Out of 20 deals, chasing 2 is about right. The fast

James Jones · Answer

Glad it's useful — speed of underwriting is the whole edge with wholesaler deals.

Lee Burns · Answer

Great post! I'm working on my systems and this is a great succinct write-up to add to my flow

How I underwrite a wholesaler deal in 10 minutes

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