1. Property Entry

Input: Property details (price, location, type, condition).

2. Market Analysis Check

Data Needed:

• Local market rent averages (Zillow, Rentometer).

• Vacancy rates (Census data, local property managers).

• Appreciation trends (NeighborhoodScout, MLS comps).

• Days on Market (DOM) for similar properties.

Decision:

• Pass: Rent ≥ 1.5x PITI (mortgage + taxes + insurance) and DOM < 60 days.

• Fail: Reject or renegotiate price.

3. Financial Viability Check

Calculations:

• Gross Potential Income (GPI): Monthly rent × 12.

• Net Operating Income (NOI): GPI – (Property taxes + Insurance + Maintenance + Vacancy + Management fees).

• Cap Rate: (NOI / Purchase Price) × 100.

Decision:

• Pass: Cap rate ≥ 8% (adjust for market) and NOI > Debt Service.

• Fail: Walk away or adjust offer.

4. Financing & Cash Flow Check

Data Needed:

• Loan terms (interest rate, down payment, loan term).

• Debt Service: Mortgage calculator output.

• Cash Flow: NOI – Debt Service.

Decision:

• Pass: Cash flow ≥ $200/door (or investor’s target).

• Fail: Renegotiate financing terms or reject.

5. 1% Rule Check

Calculation:

• Monthly Rent ≥ 1% of Total Acquisition Cost (purchase + rehab).

Decision:

• Pass: Proceed.

• Fail: Reject (unless value-add potential).

6. Rehab & ARV Check (For Flips)

Data Needed:

• After Repair Value (ARV): Comps + appraisal.

• 70% Rule: Max offer = (ARV × 0.7) – Rehab costs.

Decision:

• Pass: Purchase price ≤ 70% Rule threshold.

• Fail: Reject or renegotiate.

7. Exit Strategy Validation

Options:

• Buy & Hold: 10-year cash flow projections.

• Fix & Flip: ARV – Holding costs – Rehab – Purchase price ≥ 20% profit margin.

• BRRRR: Refinance appraisal must cover 75%+ of total investment.

Decision:

• Pass: Exit strategy ROI ≥ 15% annualized.

• Fail: Reject.

8. Final Deal Scorecard

Metrics to Aggregate:

• Cash-on-Cash Return: (Annual Cash Flow / Total Cash Invested) × 100.

• IRR (Internal Rate of Return).

• Risk Score: Market volatility + tenant demand + loan leverage.

Final Decision:

• Greenlight: All metrics meet investor thresholds.

• Red Flag: 1+ critical fails (e.g., negative cash flow, low cap rate).

Key Notes for Flowchart Design:

1. Use automated formulas (e.g., Excel/Google Sheets) to plug in inputs and auto-calculate metrics.

2. Include escape valves (e.g., “Renegotiate Offer” loops).

3. Bold rejection triggers (e.g., “ARV < Purchase Price + Rehab + 20% Profit”).

4. Add risk warnings (e.g., “Over-leverage” if loan > 75% ARV).

This system forces investors to confront hard numbers—not emotions—to avoid costly mistakes.