The 15-Minute Deal Evaluation Framework

How to quickly determine if a property is worth pursuing—before you waste time on due diligence.

Time is the most expensive resource in real estate investing. Not capital—time. You can raise capital if you have a good deal. You can't get back the hours you spent analyzing a property that was never going to work.

I developed this framework after wasting an entire weekend analyzing a fourplex that failed on basic math. The property was listed at $380,000. I spent hours pulling comps, creating spreadsheets, driving by the property three times, and building a detailed renovation budget. Then I finally calculated the actual cash-on-cash return. It was 4.2%. I could get better returns in a savings account. I'd burned sixteen hours on a deal that should have been killed in fifteen minutes.

Never again.

Minutes 1-3: The Purchase Price Reality Check

Pull up the listing. Look at the asking price. Now calculate what you can actually afford to pay based on comparable sales in the area. Use recent sales within a half-mile radius from the past six months. If you don't have this data readily available, you need to build a database of your target markets before you look at deals.

If the asking price is more than 10% above realistic comps, this is probably a pass unless there's something exceptional about the property. Don't assume you'll negotiate them down. Most overpriced properties stay overpriced until they don't—and that process takes months.

Minutes 4-7: The Income Test

If it's a rental property, you need to verify current rents and vacancy rates. Don't trust the seller's pro forma. Look up actual rental listings for comparable units in the same neighborhood on Zillow, Apartments.com, or wherever rentals are listed in your market.

Calculate gross rental income using market rents, not aspirational rents. Apply a realistic vacancy rate—I use 8% in most markets, higher in tertiary markets or for properties with tenant issues. If the numbers the seller is showing you are more than 15% above market reality, you're looking at a story, not a property.

Minutes 8-11: The Expense Gut Check

Here's where most new investors get destroyed. They underestimate expenses. I use a simple rule: take the seller's expense projection and increase it by 25%. If the deal still works, continue. If not, pass.

For properties you're seriously considering, you'll verify actual expenses later. For now, you just need to know if you're in the ballpark. As a baseline, expect expenses to run 40-50% of gross rental income for most residential properties. This includes property taxes, insurance, maintenance, capital reserves, property management, utilities (if you're paying any), and vacancy. If someone is telling you expenses will be 30% or less, they're either lying or incompetent.

Minutes 12-15: The Return Requirement

Now calculate your minimum return threshold. I use a 12% cash-on-cash return as my floor for residential properties in secondary markets. Your number may differ based on your market, strategy, and risk tolerance. The key is to have a number before you look at deals.

Does this property meet your threshold? Run a quick calculation: annual net operating income (rental income minus expenses) divided by your total cash investment (down payment, closing costs, immediate repairs). If it's below your threshold, move on unless there's a clear value-add opportunity you can execute.

The Result

This framework won't tell you if a property is a great deal. It will tell you if it's worth another three hours of your life to find out. That's the goal. Screen fast, investigate selectively, and only do deep due diligence on properties that have already passed basic scrutiny.

In practice, I reject about 90% of properties in this fifteen-minute screen. That's not a bug—it's a feature. The faster you eliminate bad deals, the more time you have to thoroughly analyze the good ones.

Set a timer. Fifteen minutes per property. When it goes off, you either move to due diligence or move on. No exceptions.