Real Estate Playbook Center

Steps

1. Pick one cash-flow market using the Investment Atlas.
2. Run 10+ listings through the Rental ROI calculator weekly.
3. Build a 6-month reserve before submitting an offer.
4. Underwrite to a 1.25+ DSCR and 8%+ cash-on-cash.
5. Stress-test the deal at 10% vacancy and +1% rate.
6. Close, stabilize, refinance reserves back to 6 months.

Pitfalls

• ! Skipping reserves to stretch the down payment.
• ! Trusting seller's pro forma rents — verify with rent comps.
• ! Buying in markets with negative population growth.

Steps

1. Buy distressed at 70% of ARV minus rehab costs.
2. Use hard money / private capital for acquisition + rehab.
3. Project-manage rehab to 90-day completion.
4. Refinance into 30-year fixed at 75% LTV of new ARV.
5. Hold for cash flow, redeploy recycled capital.

Pitfalls

• ! Optimistic ARV — get 3 BPOs before buying.
• ! Underbudgeting contingency (use 15% minimum).
• ! Refi window closing if rates jump 100bps mid-project.

Steps

1. Verify STR is legal at the city + HOA level — in writing.
2. Run the Airbnb Profit calculator with conservative ADR.
3. Underwrite to break even at 50% occupancy.
4. Furnish with $15–25/sq ft budget for the market tier.
5. Launch on Airbnb + VRBO + direct booking site.
6. Re-price weekly using dynamic pricing tools.

Pitfalls

• ! Regulatory risk — assume rules can change in 24 months.
• ! Over-leveraging on optimistic ADR assumptions.
• ! Treating STR as passive — it is a hospitality business.

Steps

1. Define an investment thesis (geography, vintage, size).
2. Build broker relationships in 2–3 target submarkets.
3. Underwrite to in-place NOI, then upside NOI separately.
4. Use DSCR or agency debt — never bridge without exit.
5. Hire third-party PM unless you have ops experience.
6. Refi or sell at the value-add milestone (24–36 months).

Pitfalls

• ! Buying at exit cap; underwrite a 50bps cap expansion.
• ! Ignoring CapEx — assume $1,500/unit/yr reserves.
• ! Underestimating insurance + property tax reassessment.

Steps

1. Set the monthly cash-flow target and reverse-engineer doors needed.
2. Diversify across 2+ markets and 2+ asset types.
3. Cap single-property exposure at 25% of portfolio value.
4. Maintain weighted LTV under 70% and 6+ months reserves.
5. Refinance opportunistically; never refinance into ARM debt.
6. Re-invest 50%+ of cash flow until the target is hit.

Pitfalls

• ! Chasing yield in declining markets.
• ! Concentrating in one operator or one city.
• ! Skipping insurance / umbrella coverage upgrades.