Real Estate Investment & Operations Engine

> Complete real estate system — from deal sourcing through portfolio management. Covers buying, selling, investing, landlording, and development with actionable frameworks, calculators, and templates.

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Phase 1: Investment Strategy & Criteria

Strategy Selection Matrix

| Strategy | Capital Needed | Time Commitment | Risk | Cash Flow | Appreciation | |----------|---------------|-----------------|------|-----------|-------------| | Buy & Hold (rental) | Medium | Medium | Low-Med | ✅ Strong | ✅ Long-term | | BRRRR | Medium-High | High | Medium | ✅ Recycled | ✅ Forced | | Fix & Flip | High | Very High | High | ❌ Lump sum | N/A | | House Hack | Low | Low | Low | ✅ Offset | ✅ Yes | | Wholesale | Very Low | High | Low | ❌ Fee-based | N/A | | Short-Term Rental (STR) | Medium | High | Med-High | ✅✅ Higher | ✅ Yes | | Commercial | Very High | Medium | Medium | ✅ Strong | ✅ Yes | | Land Banking | Low-Med | Very Low | Med-High | ❌ None | ✅✅ Speculative | | REIT/Syndication | Any | Very Low | Varies | ✅ Passive | ✅ Diversified |

Investment Criteria YAML

investment_criteria:
  strategy: "buy_and_hold"  # buy_and_hold | brrrr | flip | house_hack | str | commercial
  markets:
    primary: ""        # City/metro you know best
    secondary: []      # Expansion markets
  property_types: []   # SFR, duplex, triplex, fourplex, MFH, commercial
  price_range:
    min: 0
    max: 0
  target_metrics:
    min_cash_on_cash: 8       # % annual
    min_cap_rate: 6           # %
    max_price_per_unit: 0     # For multi-family
    min_monthly_cashflow: 200 # Per unit, after all expenses
    max_rehab_budget: 0       # For value-add
  financing:
    available_cash: 0
    max_leverage: 80          # % LTV
    preferred_loan: "conventional"  # conventional | FHA | VA | DSCR | hard_money | seller_finance
  deal_breakers:              # Auto-reject
    - "flood_zone"
    - "foundation_issues"
    - "environmental_contamination"
    - "declining_population"
  nice_to_haves:
    - "below_median_price"
    - "near_employment_centers"
    - "growing_population"
    - "landlord_friendly_state"

Market Analysis Framework

Score each market (0-100):

| Dimension | Weight | Metrics | |-----------|--------|---------| | Population Growth | 20% | 5yr trend, net migration, age demographics | | Job Market | 20% | Unemployment rate, employer diversity, wage growth | | Rent-to-Price Ratio | 15% | Gross rent / purchase price (>0.7% = good) | | Landlord Friendliness | 15% | Eviction timeline, rent control, regulations | | Supply/Demand | 15% | Vacancy rates, permits issued, absorption | | Affordability | 10% | Median income vs median home price | | Infrastructure | 5% | Transportation, schools, development plans |

Market grades:

• 80-100: Aggressively acquire
• 60-79: Selectively acquire (cherry-pick deals)
• 40-59: Hold existing, don't acquire
• Below 40: Consider exit

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Phase 2: Deal Sourcing

8 Deal Channels (Ranked by Quality)

1. Direct Mail — Targeted lists (absentee owners, tax delinquent, estate/probate). Response rate: 1-3%. Cost: $0.50-$2/piece
2. Driving for Dollars — Physical scouting for distressed properties. Free but time-intensive. Use DealMachine or similar to track
3. Wholesaler Network — Pre-negotiated deals at markup. Verify ARV independently. Quality varies wildly
4. MLS (Agent) — Listed properties. Most competitive. Look for: days on market >30, price reductions, motivated keywords
5. Auction — Foreclosure, tax lien, estate. Due diligence limited. Cash required. Discount: 20-40% typical
6. FSBO — For Sale By Owner. Direct negotiation, no agent commission baked in
7. Networking — REI meetups, BiggerPockets, local REIA chapters. Long-game relationship building
8. Online Marketplaces — Zillow, Redfin, Realtor.com, Roofstock, Auction.com

Deal Screening Checklist (5-Minute Filter)

□ Meets price range criteria
□ Rent-to-price ratio > 0.7% (or flip ARV margin > 30%)
□ No deal-breaker conditions
□ Neighborhood grade C+ or better
□ Verified comparable sales within 6 months
□ No major structural red flags from photos
□ Zoning allows intended use
□ Insurance obtainable (not in exclusion zone)

If ALL checked → proceed to full analysis. If ANY unchecked → pass or investigate.

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Phase 3: Deal Analysis

Rental Property Calculator

MONTHLY INCOME
  Gross Rent:                    $______
  + Other Income (laundry, parking, storage):  $______
  = Gross Monthly Income:        $______

MONTHLY EXPENSES
  Mortgage (P&I):                $______
  Property Tax:                  $______ (annual / 12)
  Insurance:                     $______ (annual / 12)
  Vacancy Reserve:               $______ (8-10% of gross rent)
  Maintenance Reserve:           $______ (8-10% of gross rent)
  CapEx Reserve:                 $______ (5-8% of gross rent)
  Property Management:           $______ (8-12% of gross rent)
  HOA/Condo Fees:               $______
  Utilities (if landlord-paid):  $______
  = Total Monthly Expenses:      $______

MONTHLY CASH FLOW = Gross Income - Total Expenses
ANNUAL CASH FLOW = Monthly × 12

KEY METRICS
  Cash-on-Cash Return = Annual Cash Flow / Total Cash Invested × 100
  Cap Rate = NOI / Purchase Price × 100
  NOI = Annual Income - Annual Operating Expenses (excluding mortgage)
  GRM = Purchase Price / Annual Gross Rent
  DSCR = NOI / Annual Debt Service (lenders want > 1.25)
  50% Rule (screening): Expenses ≈ 50% of gross rent (excluding mortgage)

Fix & Flip Calculator

ACQUISITION
  Purchase Price:       $______
  Closing Costs (buy):  $______ (2-4%)
  = Total Acquisition:  $______

REHAB
  Renovation Budget:    $______
  + Contingency (15%):  $______
  = Total Rehab:        $______

HOLDING COSTS (Monthly × Hold Time)
  Loan Payments:        $______ /mo × ____ months
  Insurance:            $______ /mo × ____ months
  Taxes:               $______ /mo × ____ months
  Utilities:           $______ /mo × ____ months
  = Total Holding:      $______

SELLING COSTS
  Agent Commission:     $______ (5-6% of ARV)
  Closing Costs:       $______ (1-2% of ARV)
  Staging:             $______
  = Total Selling:     $______

TOTAL INVESTMENT = Acquisition + Rehab + Holding + Selling

PROFIT = ARV - Total Investment
ROI = Profit / Cash Invested × 100

RULES:
  70% Rule: Max Offer = ARV × 0.70 - Repair Costs
  Minimum profit target: $25,000 or 15% of ARV

BRRRR Analysis

BUY:     Purchase price + closing costs
REHAB:   Renovation budget + contingency
RENT:    Market rent verification (3+ comps)
REFINANCE:
  After Repair Value (ARV):     $______
  Refinance LTV (75%):          $______
  New Loan Amount:              $______
  Cash Recovered:               New Loan - Original Loan Payoff
  Cash Left In Deal:            Total Invested - Cash Recovered
REPEAT:
  Cash-on-Cash = Annual Cash Flow / Cash Left In Deal
  Target: Infinite return (recover 100%+ of cash invested)

Stress Test (MANDATORY Before Buying)

Run every deal through these scenarios:

| Scenario | Test | Pass Threshold | |----------|------|----------------| | Vacancy Spike | What if vacancy hits 20%? | Still cash-flow positive | | Rate Increase | What if rates rise 2%? (ARM/refi) | Still cash-flow positive | | Rent Decline | What if rents drop 10%? | Still covers mortgage + reserves | | Major Repair | $10K-$20K unexpected expense | Can cover without selling | | Market Crash | What if value drops 20%? | Not underwater on loan | | Eviction | 3 months no rent + legal costs | Reserves cover it |

If ANY scenario = financial distress → don't buy or renegotiate terms.

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Phase 4: Due Diligence

Property Inspection Checklist

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