What to look for and what to pay. Built so a property you lock against these numbers is one we can place with a buyer the same week.
The instrument
Four numbers you can get in ten minutes: the HUD payment standard for the bedroom count, the current tax bill from the county auditor, an insurance quote, and your rehab estimate. Everything else is pre-set to our standard.
Management 10% and maintenance 7% of collected rent are fixed and not adjustable. Vacancy is absorbed in the 85% downside case rather than carried as a separate line.
Maximum you can offer
Lock below this and the deal still works for everyone.
Binding constraint: rent-to-price floor.
Screen first
Run these before you run numbers. A property that fails any line here is not worth pricing.
| Criterion | Standard |
|---|---|
| Markets | In priority order: 1. Cleveland and Akron, Ohio 2. Birmingham, Alabama 3. St Louis, Missouri 4. Memphis, Tennessee. Work them in that order — a Cleveland deal places faster than a Memphis one. Nothing outside these four without asking first. |
| Type | Single-family, 3 bed. 1,000–1,500 sq ft. |
| Condition | Rent-ready or close. $1,000–$5,000 of light work — paint, flooring patches, minor plumbing and electrical, clean-out. |
| Roof | Under 15 years, no active leaks, no soft decking. |
| Furnace and water heater | Under 15 years and currently operating. |
| Basement | Dry. No standing water, no active seepage, no bowing walls. |
| Sewer | No known lateral collapse or root intrusion. Scope it if the house is pre-1940 and you can. |
| Rent support | The payment standard must be backed by at least two live Section 8 listings for the same bedroom count in the same zip. |
| Loan size | Sale price must be above $62,500 so the buyer's 80% loan clears the $50,000 lender minimum. |
| Full gut | Anything needing a systems replacement or a full rehab. Our buyers are placing a tenant in 45 days, not managing a project. |
| Over-shopped | If it has been on a buyers list, in a group chat, or offered to another dispo desk, we can't use it. |
| No control | We only market what you actually have under contract. Not a verbal, not a handshake with the seller. |
| Occupied by a non-paying tenant | Eviction risk transfers to our buyer and kills the timeline. Vacant or performing tenant only. |
| Open code violations | Cleveland point-of-sale and lead-safe requirements can force escrowed repairs at closing. Disclose anything open before we price it. |
What sits behind the numbers
These are the constants every deal is priced against, so a property you lock is priced the same way the buyer will price it.
| Line | Treatment |
|---|---|
| Rent — base case | 100% of the HUD payment standard for the zip and bedroom count. |
| Rent — downside case | 85% of the same figure. This is the vacancy and rent-reasonableness stress in one number. |
| Management | 10% of collected rent. |
| Maintenance | 7% of collected rent. |
| Taxes | The actual current bill from the county auditor. Never an estimate, never a percentage. |
| Insurance | A real quote where you can get one, and note whether it settles at replacement cost or actual cash value. If you can't, use $1,200 a year for Cleveland and Akron, $1,300 for St Louis, $1,600 for Memphis, $1,800 for Birmingham. Placeholder only — we replace it with a live quote before the deal goes to a buyer. |
| Debt | DSCR loan, 20% down, 30-year term, 7.75%. Lender minimum loan $50,000. |
| DSCR test | Market rent divided by PITI, at or above 1.0. Lenders underwrite to appraised market rent, not the Section 8 contract rent. |
| Pass — base | Cash flow of $250–500 a month at 100% of the payment standard. |
| Pass — downside | Cash flow above zero and DSCR at or above 1.0 at 85%. |