Protect your reserves.
The down payment should not be your last dollar. Vacancy, repairs, turns, and capital projects do not wait for a convenient month.
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See whether the rent can support the payment, expenses, and reserves.
Model long-term or short-term rent, operating costs, cash flow, debt service coverage ratio (DSCR) financing, and the cash you may need before deciding whether the property works for you.
Best for: Buyers evaluating cash flow while growing their wealth through real estate.
RUN A RENTAL SNAPSHOT
Start with what the property asks of your cash.
Model the cash the purchase may require, realistic income, operating allowances, and what remains after the property carries its costs.
1
Cash into the property
What may be committed before the first rent payment?
Want to get particular about the numbers?Closing costs, repairs, and sources of cash
Amount still to plan for$63,750Illustrative equity-line room$210,000
$750,000 × 80% − $390,000. This is a planning estimate, not a HELOC offer.
2
Monthly property performance
Use realistic rent and leave room for imperfect months.
KEEP THIS PLANTake your numbers with you.
Send it to Elizabeth Email, text, or copy this planning snapshot. Nothing is submitted or stored by this site.
NUMBERS MEET REAL LIFE
A strong plan leaves room for the property to be a property.
Separate hope from underwriting.
Appreciation and rent growth may help over time. The purchase should still make sense using today's realistic assumptions.
Choose financing that fits the strategy.
A conventional rental, HELOC, renovation loan, and BRRRR plan ask different things of your cash, documentation, and timeline.
02 · DSCR FINANCINGLet the property do the qualifying.+
LANDLORD LENDING
A plain-English look at debt service coverage ratio (DSCR).
That is what I call Landlord Lending. Instead of using your employment income to qualify, many DSCR programs look primarily at whether the property's eligible rent supports its housing expense.
Eligible monthly rent÷Mortgage + taxes + insurance + HOA= DSCR
My planning guideline: we want at least a .75 DSCR, and ideally 1.0 or higher. At 1.0, eligible rent matches the qualifying housing expense. The specific program, rent documentation, down payment, reserves, and property type still matter.
For a short-term rental, a lender may not simply accept a projected nightly rate. Depending on the program, qualifying income may come from an appraisal rent schedule, documented operating history, or other approved sources.
03 · VALUE-ADD PLANNINGFree BRRRR Calculator+
SEE THE PLAN BEFORE YOU START THE WORKHOW BRRRR WORKS
What BRRRR means.
It is a real estate investment method where you purchase a distressed property below market value, renovate it to force appreciation, place a tenant, complete a cash-out refinance based on the new value to pull your capital back out, and use those funds to buy the next property.
QUESTIONS WORTH ASKING
Before an investment property becomes part of the plan.
How much down payment might an investment property require?
Investment properties commonly require more down than a primary residence. The exact amount depends on the property, loan program, credit profile, reserves, number of financed properties, and other qualification factors.
Can I use equity from my current home?
A HELOC, home equity loan, or cash-out refinance may provide purchase or renovation funds. The added payment, available equity, qualification, tax treatment, and effect on your reserves should be reviewed before relying on it.
What if my tax returns do not reflect my current income?
Depending on your profile and the property, a non-QM loan may offer a different way to document income or qualify. That could include a bank statement loan, a DSCR loan that focuses primarily on eligible property rent, or a portfolio loan held by the lender. These options are not interchangeable, and rates, down payment, reserves, documentation, and property requirements vary.
Can I use a 1031 exchange to buy another rental property?
A properly structured Section 1031 like-kind exchange may allow an investor to defer recognizing certain gains when eligible real property held for investment or business use is exchanged for other eligible real property. The rules and deadlines are strict, a vacation home has additional considerations, and this requires guidance from a qualified intermediary and tax professional before a sale closes. Review the IRS real-estate exchange guidance.
What does cash-on-cash return tell me?
It compares estimated annual pre-tax cash flow with the cash invested in the property. It is one useful measure, but it does not capture appreciation, principal reduction, major future repairs, financing changes, or tax consequences.
Does your question cross more than one path?
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