Module 9 — Screening Deals in 5 Minutes

Topic 9.1: The "50% Rule" for Quick Screening

When your agent sends you ten listings, you can't spend an hour underwriting each one. You need a quick filter. The 50% Rule is a rule of thumb that states that your operating expenses (everything except the mortgage) will be roughly 50% of your gross rent.

Example: A property rents for $2,000/month. The 50% rule suggests your total OpEx will be about $1,000/month. This leaves you with an estimated NOI of $1,000/month.

Strategic Coaching: This is NOT a substitute for detailed underwriting. It's a quick test. In many markets today, expenses are higher than 50%. But if a deal doesn't look promising even with this simple rule, it's probably not worth a deeper dive.

Topic 9.2: Back-of-the-Napkin Math: Estimating Cash Flow

Let's apply the 50% rule t