Real Estate Underwriting Starter.

Real Estate Underwriting Starter

Four skills pulled from the Art of Underwriting system — Lamin's method for evaluating any deal, in any market, on any timeline. This is the entry pack. It will not make you an expert overnight. It will get you to "I can tell if this deal is a maybe or a no" in twenty minutes per deal.

Who this is for

• New investors trying to do their first 1–4 unit
• Wholesalers who keep getting laughed at by buyers
• Agents who want to start working with investors
• Anyone tired of paying $99/month for deal-analysis software they barely use

What's inside

01. The Pre-Qualifier (5 minutes)

Before you run a single number, the deal either passes the pre-qualifier or it dies on the table. Five filters:

1. Is the seller motivated? Code, divorce, death, downsizing, foreclosure, out of state. If "looking to test the market" — kill it.
2. Is the price within 15% of after-repair value (ARV)? Pull comps. If asking is more than 85% of ARV, the deal will never pencil for an investor exit.
3. Is the property in a market you'd lend on? If you wouldn't take this house as collateral on a personal loan, you shouldn't buy it.
4. Is there a clear exit? Fix-and-flip, BRRRR, hold-as-rental, wholesale. Name it.
5. Can you close in 30 days? Title clean? Liens identified? Tenants compliant?

Two no's = walk. Three no's = run.

02. Comprehensive MAO (10 minutes)

Maximum Allowable Offer — the price above which the deal stops working.

MAO = (ARV × 0.70) − Rehab Estimate − Holding Costs − Wholesale Fee

• ARV — pull three comps within ½ mile, sold in last 90 days, similar bed/bath/sqft. Average. That's ARV.
• 0.70 — your floor. Below this and there's no margin for surprises.
• Rehab Estimate — walk it. If you can't walk it, assume worst case and add 20%.
• Holding Costs — 6 months × (mortgage + tax + insurance + utilities). Even if you plan to flip in 90 days.
• Wholesale Fee — if you're wholesaling, add your $10K minimum here.

If MAO is below seller's asking, your job is to make the seller motivated enough to sell at MAO. If MAO is below the rehab cost alone — kill it.

03. The Creative Financing Tree (15 minutes)

Five exit branches when MAO doesn't work at cash price:

• Seller Financing — seller carries note for X years at Y%. Math: how much does this lower your effective MAO?
• Subject-To — take over the existing mortgage. Math: equity captured at closing.
• Lease Option — control the property without owning it. Math: how much do you owe seller monthly to break even?
• Wholetail — list it on the MLS as-is for slightly under ARV. Math: ARV × 0.85 minus closing.
• JV with Existing Owner — split profits with seller. Math: what's their hurdle and what's yours?

Most beginners only have one tool — cash. The market doesn't always give you cash deals. Five tools means five times as many deals are workable.

04. The Five-Phase Multifamily Filter

When you graduate from 1–4 units into 5+ units, the math changes. This filter keeps you from buying a 12-unit you can't operate:

1. Phase 1 — Trailing 12 financials. T12 must show consistent occupancy >90% and expense ratio <55%.
2. Phase 2 — Rent roll vs market rents. If actual rents are within 10% of market, there's no value-add play.
3. Phase 3 — Capex inspection. Roof, HVAC, plumbing, electrical age. Stack capex needs against your cash reserves.
4. Phase 4 — Operator fit. Can you (or your property manager) actually run this asset class in this submarket?
5. Phase 5 — Exit underwriting. Refinance cash-out math at year 3. If you can't pull capital out, you can't recycle into the next deal.

A deal that passes 1–5 is fundable. A deal that fails any one of them needs a workaround or a kill.

How to use

Copy the four sections above into a single template doc. For every deal, fill in the four sections in order. If a deal dies in section 01, you've saved an hour. If it passes 04, you have an underwritten deal that any lender or partner will take seriously.

What you'll need

• A spreadsheet (Google Sheets is fine — no Excel macros required)
• Comp data — Zillow / Redfin / your MLS access
• Calculator — your phone

That's it. No paid software. No course.

The next level

If this pack lands and you want the full Art of Underwriting system — including the creative financing case bank, the 5-phase multifamily templates, and the lender conversation scripts — that lives behind the daily emails. Subscribe at /newsletter.

— Lamin Ngobeh