Underwriting Criteria For Deals

[Scott Thissen]

Hey guys!

I'm in the process of closing on my second deal now (a live-in flip) and I've been working on developing my own underwriting criteria for how I evaluate deals. I've heard this mentioned on several blog posts and podcasts, so I figured it's something I need to do before I get in to deep. I wrote every thing down below. I'd appreciate any feedback or people willing to take the time to shoot holes in my thought process! Especially if there is anything I should be considering that relates to the desirability of the unit.

Strategy: Buy and Hold

Criteria: 

- $100 of profitable cash flow per unit (gross cash flow minus expenses and property management)

- Units with at least 2 bedrooms and 1 bath, no more than 3 bedrooms and 2 baths

- Applies to SFH and Multi Family

- C tenant areas or better

- No pools

I also plan to self manage but I want to build that 10% into my criteria for future deals.