This rule provides a quick assessment, but detailed underwriting is necessary for accuracy.Now, let's break it down further.

To set the scene: A cost seg study breaks your property into two important categories:1250 "real" property aka the building, foundation and other long life assets.1245 property aka anything that can be accelerated such as 5, 7, or 15 year property like carpets, cabinets, or other site improvements.

Along with that they won't appreciate and you will have a hard time selling @Caleb Brown This is really helpful advice — thank you for breaking it down so clearly.

We "back into" the "strike price"...the price we're willing to pay for a loan where we start with the ARV, then back off time-value of money in getting the property back, collection costs, rehab costs, profit margin, and several other items we add in.

Deeper analysis:Once a deal passes the sniff test, plug into a more detailed calculator.

Only a $520k sale keeps it comfortably profitable.So your break-even zone is around $480k–$485k if it drags out.✅ Bottom line: This deal works if:You can keep days-on-market short (≤60 days), orYou can confidently list/sell at the high end ($495k–$510k+).If it sits too long and sells toward the low end ($470s), you risk burning cash or barely breaking even. you are correct, you are taking on someones problem to make it your own.

I'm not sure what you mean by alignment question but I wish I had asked how does a property manager determine if a repair that a tenant is requesting is due to malfunction of the system or part (so the owner's responsibility) or something the tenant is doing either intentionally or unintentionally to cause something to break.

For me, the takeaway is simple: I recently looked at a duplex in East Dallas that checked a lot of the boxes. The property was listed for $350,000, and each side was renting for $1,100 a month. After taxes, insurance,...

It's not that hard to obtain 10% down with 100% rehab financing and your funds are going to equity, not into a lender's pocket. 

Ask about their terms, seasoning requirements, and how quickly they can close.Data/Deal Analysis: Stick to simple rules at first (70% ARV rule, rent-to-price ratio, etc.) so you don’t get stuck in analysis paralysis.Partnerships: Make sure roles and expectations are crystal clear with your partners before money gets involved.If you’d like, I can share a few resources that break down the first BRRRR step-by-step so you and your partners can hit the ground running.