When analyzing a property, do not only focus on the house. Make sure you understand what the land itself is worth. The structure could be outdated, damaged, or barely worth saving—but the lot may be the real opportunity. Ask yourself: ✅ What have similar vacant lots sold for? ✅ Can the property be subdivided? ✅ Is the zoning more valuable than the current use? ✅ Could another unit or structure be added? ✅ Is the area growing or being redeveloped? Sometimes the house is not the gold mine. It is just sitting on top of it. 💰 Always underwrite the building and the land before deciding what the deal is truly worth.

Too many investors calculate cash-on-cash (CoC) once and call it a day. That’s how deals get misunderstood. You should always run both: 🔹 Current Cash-on-Cash This shows what the property is doing right now. Formula: Annual Cash Flow ÷ Total Cash Invested Use: • Current rents • Current expenses • Current debt terms This answers: “What am I getting paid today?” 🔹 Pro Forma Cash-on-Cash This shows what the property can do after execution. Use: • Market rents (not wishful rents) • Stabilized expenses • Renovation + refi assumptions This answers: “What does this become if the plan works?” ⚠️ Pro Tip: If the current CoC is negative or razor thin, your pro forma better be realistic — not optimistic. Cash-on-cash exposes weak assumptions fast. 💡 Smart investors buy on current performance and improve toward the pro forma, not the other way around. 👉 Want to get sharper at this? Join the ProSphere Skool community where we break these numbers down step-by-step with real deals, not theory. www.skool.com/prosphere-1303 ☕📈 Learn it. Underwrite it. Execute it.

When reviewing a deal, always compare market rents to the current rent roll. Here’s what you’re looking for: 🔍 Rents Match Market ➡️ Limited upside. Deal must work as-is. 📉 Rents Below Market ➡️ Potential value-add. Validate why they’re low (management, condition, lease terms). 📈 Rents Above Market ➡️ Red flag 🚩Future projections may be inflated or unsustainable. 💡 Pro Tip: Future projections should be earned, not assumed. If the rent roll doesn’t support market claims, your underwriting should reflect reality—not the broker’s pro forma. 👇 Want to sharpen this skill and underwrite with confidence? Join our ProSphere Skool Community where we break down real deals, rent comps, and underwriting frameworks step by step. www.skool.com/prosphere-1303

One of the smartest ways to review a T-12 (trailing 12 months of income & expenses) is to compare it against the 50% expense rule. 🔍 Here’s how pros do it: Take the gross rental income and assume: 👉 50% goes to operating expenses (taxes, insurance, repairs, management, vacancy, utilities, CapEx, etc.) Then compare it to what the T-12 actually shows. ✅ If T-12 expenses are LOWER than 50% → great, but still underwrite at 50% for safety ⚠️ If T-12 expenses are HIGHER than 50% → dig deeper (there may be deferred maintenance, poor management, or rising costs) 💡 Why always use the 50% rule? Because it protects you from: • Overly optimistic seller numbers • Unexpected repairs & vacancies • Cash flow surprises after closing Smart investors underwrite conservatively — profits come from the margin of safety. 📈 Want to learn how to analyze deals like a pro? Join the ProSphere Community where we break down real deals step-by-step. www.skool.com/prosphere-1303

When underwriting a deal, always start with long-term rental (LTR) numbers…every time! 🚫 Never base your deal on: • Section 8 rents • Airbnb / short-term rental projections • Best-case or “pro forma” rent assumptions Why this matters 👇 ✅ LTR is the baseline reality It’s the most stable, lender-accepted, and market-tested income source. ✅ Protect your exit strategies Regulations change. Markets shift. Airbnb and Section 8 can vanish. LTR demand stays. ✅ True risk exposure Short-term and Section 8 numbers often mask vacancy, regulation, and management risk. 🧠 The Pro Rule If it doesn’t cash flow as a long-term rental, it’s not a deal, it’s a gamble. Once it works as an LTR, then you can layer in: ✔️ Section 8 ✔️ Airbnb ✔️ Mid-term or furnished rentals