The 15-Minute Framework
Most deals are not worth pursuing. The key is knowing which ones deserve your time and which ones to skip. This framework lets you screen any property in 15 minutes or less.
Minutes 1 to 3: The 1% Test
Monthly rent divided by purchase price. If it is below 0.8%, move on unless you have a specific appreciation or value-add thesis.
Minutes 4 to 7: Estimate Monthly Cash Flow
- Gross rent: Check Zillow, Rentometer, or local comps
- Mortgage payment: Use an online calculator (current rates, 20% down, 30-year fixed)
- Taxes: Check county records (divide annual by 12)
- Insurance: Estimate $100 to $150/month for a single-family
- Vacancy: 8% of gross rent
- Maintenance: 10% of gross rent
- Management: 10% of gross rent (even if self-managing, account for your time)
Minutes 8 to 10: Calculate Net Operating Income
Gross rent minus all expenses (except mortgage) equals NOI. Then subtract your mortgage payment. Positive number? Keep going. Negative? Walk away or renegotiate.
Minutes 11 to 13: Check the Neighborhood
Look at population growth, job market, school ratings, and crime stats. A great deal in a declining area is not a great deal.
Minutes 14 to 15: Make Your Decision
Does this property meet your minimum cash flow target ($100 to $200/month per unit)? Is the neighborhood trending positively? If yes to both, it deserves a deeper dive.
Download our Deal Analysis Spreadsheet for the full detailed analysis, or learn the complete framework in the First Property Playbook.