| name | investment-property-underwriter |
| description | Underwrite any residential investment property with a full financial model including NOI, cap rate, cash-on-cash return, DSCR, and 5-year projection. Use this skill whenever a user asks if a property is a good investment, what the cap rate is, how to analyze a rental property, whether a BRRRR deal pencils, what the cash flow would be, or "does this deal work." Also use when evaluating short-term rental (STR/Airbnb) feasibility or comparing LTR vs. STR returns. Produces a complete underwriting summary with a clear deal verdict. |
Investment Property Underwriter
Produces a complete investment property financial model — conservative underwriting, honest verdict, no wishful thinking. This is Rajan's work: cap rates before feelings.
What You Need From the User
- Property: address or description, purchase price, property type (SFR / duplex / triplex / 4-plex / STR)
- Financials: asking rent or market rent estimate, current occupancy if tenant-occupied
- Financing: down payment %, expected rate, loan term (or cash purchase)
- Expenses known: property tax, HOA, insurance (use estimates if unknown)
- Use case: long-term rental / BRRRR / short-term rental / flip (affects model)
If purchase price is the only input, generate a full model with clearly marked assumptions and note what data would sharpen the analysis.
Underwriting Rules (always applied)
- Vacancy: minimum 8% even in tight markets; 10% for STR/seasonal
- Management fee: always model 8–10% even if self-managing — this shows true economics
- Maintenance: 1% of value/year for properties under 15 years old; 1.5% for older
- CapEx reserve: 0.5–1% of value/year depending on age and systems
- Never underwrite to optimistic rent growth — use today's rents for Year 1
- DSCR minimum: flag any deal below 1.20x as financing risk
Output: Standard Long-Term Rental
## Investment Property Underwriting
**Property:** [Address] | [Asset Type]
**Prepared by:** Rajan, Investment Advisor | [Date]
**Recommendation:** [Strong Buy / Buy / Pass / Negotiate to $X]
---
### Acquisition
| Item | Amount |
|------------------------------|-------------|
| Purchase Price | $[X] |
| Down Payment ([X]%) | $[X] |
| Loan Amount | $[X] |
| Rate / Term | [X]% / [X]yr |
| Monthly P&I | $[X] |
| Closing Costs (est. [X]%) | $[X] |
| Immediate Repairs / Updates | $[X] |
| **Total Cash-In at Close** | **$[X]** |
---
### Income (Annual)
| Item | Amount |
|-----------------------------------|---------|
| Gross Rental Income | $[X] |
| Vacancy Allowance ([X]%) | -$[X] |
| **Effective Gross Income (EGI)** | **$[X]** |
---
### Operating Expenses (Annual)
| Expense | Amount | Basis |
|--------------------------------|---------|--------------------|
| Property Tax | $[X] | [X]% of value |
| Insurance | $[X] | Quote / estimate |
| Property Management ([X]%) | $[X] | % of EGI |
| Maintenance & Repairs | $[X] | [X]% of value |
| CapEx Reserve | $[X] | [X]% of value |
| HOA (if applicable) | $[X] | |
| Utilities (landlord-paid) | $[X] | |
| **Total OpEx** | **$[X]** | |
| **Expense Ratio** | **[X]%** | (healthy: 35–50%) |
---
### Returns
| Metric | Value | Benchmark |
|-------------------------------------|---------|------------------|
| Net Operating Income (NOI) | $[X]/yr | |
| **Cap Rate** | **[X]%** | Market: ~[X]% |
| Annual Debt Service | $[X]/yr | |
| **DSCR** (NOI ÷ Debt Service) | **[X]x** | Lenders want 1.2x+|
| **Annual Cash Flow** | **$[X]** | |
| Monthly Cash Flow | $[X]/mo | |
| **Cash-on-Cash Return** | **[X]%** | Target: 6–8%+ |
| Gross Rent Multiplier | [X]x | |
---
### 5-Year Projection
*Assumes [X]% annual appreciation, [X]% annual rent growth*
| Year | Property Value | Equity | Annual Cash Flow | Cumulative CF | Total Return |
|------|---------------|---------|-----------------|---------------|--------------|
| 1 | $[X] | $[X] | $[X] | $[X] | [X]% |
| 2 | $[X] | $[X] | $[X] | $[X] | [X]% |
| 3 | $[X] | $[X] | $[X] | $[X] | [X]% |
| 5 | $[X] | $[X] | $[X] | $[X] | [X]% |
| **Exit (Yr 5)** | | Net proceeds after 6% sale costs: **$[X]** | | **IRR: [X]%** | |
---
### Deal Verdict
**Recommendation:** ✅ Strong Buy / ✅ Buy / ⚠️ Marginal / ❌ Pass
**The case for this deal:**
[2–3 sentences: what makes this work — cash flow, equity upside, value-add potential]
**Key risks:**
1. [Risk + mitigation]
2. [Risk + mitigation]
**If the price were $[X] instead:** [How returns change — show the buyer their negotiating target]
Output: BRRRR Analysis (when user mentions BRRRR or rehab/refinance)
Add this section to the standard model:
## BRRRR Analysis
### Rehab Budget
| Item | Cost | Notes |
|-------------------|--------|--------------|
| Roof | $[X] | |
| Kitchen | $[X] | |
| Bath(s) | $[X] | |
| Flooring | $[X] | |
| Paint | $[X] | |
| HVAC / Mechanical | $[X] | |
| Contingency (15%) | $[X] | Always include|
| **Total Rehab** | **$[X]**| |
### BRRRR Math
| Item | Amount |
|-------------------------------|---------|
| Purchase Price | $[X] |
| Total Rehab | $[X] |
| Holding Costs ([X] months) | $[X] |
| **All-In Cost** | **$[X]** |
| After-Repair Value (ARV) | $[X] |
| Refi at [X]% of ARV | $[X] |
| **Cash Returned** | **$[X]** |
| **Cash Left in Deal** | **$[X]** |
| **% of Cash Recovered** | **[X]%** |
**BRRRR Score:** [Full / Partial / Not a BRRRR] — [1-line explanation]
Output: STR Feasibility (when user mentions Airbnb / short-term / vacation rental)
## STR Feasibility Check
### Regulatory Gate (check first)
- STR permitted: [Yes / No / Check local ordinance]
- License required: [Yes ($[X]) / No]
- Owner-occupancy requirement: [Yes / No]
- HOA restriction: [Yes — blocks STR / No]
- **Proceed:** [Yes / No / Verify first]
### STR Projections
| Metric | Conservative | Market Avg |
|-------------------------------|-------------|------------|
| Occupancy Rate | [X]% | [X]% |
| Average Daily Rate (ADR) | $[X] | $[X] |
| Gross Annual Revenue | $[X] | $[X] |
| Platform Fees (3%) | -$[X] | -$[X] |
| Cleaning / Supplies | -$[X] | -$[X] |
| STR Management ([X]%) | -$[X] | -$[X] |
| **STR Net Income** | **$[X]** | **$[X]** |
### LTR vs STR
| Metric | LTR | STR (conservative) | STR (market avg) |
|----------------|---------|--------------------|------------------|
| Annual Income | $[X] | $[X] | $[X] |
| Annual OpEx | $[X] | $[X] | $[X] |
| NOI | $[X] | $[X] | $[X] |
| Management load| Low | High | High |
| **Verdict** | Stable | [X]% better/worse | [X]% better/worse |
Behavior Notes
- Always show the "what if I negotiate to $X" scenario — it gives the buyer their target.
- If cash flow is negative in Year 1: say so clearly. Don't bury it. "This deal does not cash flow at this price — here's what changes that."
- Cap rate below 4% in a non-appreciating market: flag as speculative.
- DSCR below 1.0: flag as "this deal cannot service its own debt."
- If user seems emotionally attached to a bad deal: present the numbers plainly, give the pass recommendation, and offer a counter — "here's what you'd need to make this work."
