The 'Trust But Verify' Underwriting Checklist for Every Offer

TL;DR

✦ 12 items. Each takes 30 seconds to 5 minutes. Total time: 30-60 minutes per deal. ✦ Designed to catch the failure modes that cost operators $20K-$80K per missed check. ✦ Print it. Tape it to your monitor. Run it before every offer. ✦ The checklist is the operator's discipline at scale.

Why a checklist beats memory

You're going to do this 50, 100, or 500 times in your investing career. Each time, the same dozen things matter. Each time, your tired/excited brain will skip one.

A checklist is the surgeon's tool. The pilot's tool. The emergency-room nurse's tool. None of those professionals trust their memory under pressure. Operators shouldn't either.

The 12 items

Pre-offer: data verification

1. ARV verified by 3+ comps within 0.5mi, 90 days, condition-adjusted

Pull comps yourself. Don't trust the Zestimate, the Redfin Estimate, or the seller's number.

2. Tax bill computed at post-reset assessed value

Pull the assessor. Compute the new bill. Add to expenses.

3. Insurance binding quote obtained (if FL/CA/TX coastal or wildfire)

Get a real, lender-spec quote. Not the listing line.

4. Rent comps pulled from local data, not OM

Median, not ask. Don't take the seller's $1,495 if the market is $1,180.

5. Local vacancy rate looked up by zip and class

Don't use 5%. Use what's actually happening.

Pre-offer: structural

6. DSCR computed at base AND stressed (rate +200bps)

Base ≥ 1.20. Stressed ≥ 1.0. Both must clear.

7. Cash-on-cash computed including all reserves and closing costs

Total cash includes down + closing + repairs + lender PITI reserves + lender op reserves + your CapEx funding.

8. Cap rate computed on operator NOI, not OM NOI

Use your rebuilt NOI. Cap rate is a sanity check, not the headline.

Pre-offer: walk decisions

9. Has any one of the 7 kill criteria failed?

Refer to: DSCR fails, CoC fails, rehab budget overrun probability >30%, DOM >90 in hot market, no inspection contingency allowed, comp data <3 sales/90 days, insurance >1.4× listed.

If any fails, walk. No emotional override.

Pre-offer: third-party signals

10. Inspection contingency required (minimum 7 days)

Non-negotiable. If the seller refuses, walk.

11. Title contingency in place + earnest money capped at 1-2% of purchase

Standard, but verify your contract reflects it.

12. Lender pre-approval letter referenced or attached

Sellers prefer offers with proof of funds. Most accepted offers include this.

How to run the checklist

First 8 deals: full manual

Print the 12 items. Run each one in order. Time yourself. Probably takes 60-90 minutes per deal initially.

Deal 9-30: develop muscle memory

By deal 10, you'll know what to look for. Speed increases. 30-45 min per deal becomes typical.

Deal 30+: tool-assisted

Use Vricko or similar platform. The 12 items collapse into 4-5 outputs the platform pre-computes. Your remaining work: verify, adjust for local knowledge, decide.

Worked example: walking through it

Address: 4-unit, $385K, Cleveland 44109.

Running the 12 items:

1. ARV pulled: $400K (median of 4 comps within 0.5mi). Asking $385K. ✓

2. Tax bill post-reset: $4,200/yr (vs OM's $2,400). +$150/mo expense.

3. Insurance binding: OM lists $185/mo. Binding quote $245/mo. +$60/mo expense.

4. Rent comps: OM lists $5,800/mo. Local comps $5,150/mo. -$650/mo income.

5. Vacancy local: 9% (Class B Cleveland 4-unit). OM uses 5%.

6. DSCR: at 7.1% rate, base 1.31. ✓ Stressed at 9.1%: 0.97. ✗ FAILS.

STOP. Item 6 fails the kill criterion. Walk.

You don't run items 7-12. You walk. Total time: 18 minutes. Saved you from a deal that would have cost $40K+ at refi.

Worked example: a deal that passes

Address: SFR, $215K, Memphis 38127.

1. ARV: $245K (median 4 comps). Asking $215K. ✓ 2. Tax post-reset: $1,800/yr. ✓ 3. Insurance: binding quote $185/mo (in line with OM). ✓ 4. Rent: $1,650/mo (matches market). ✓ 5. Vacancy local: 11% (Class C Memphis). Adjusted. 6. DSCR: base 1.34, stressed 1.04. ✓ 7. CoC: 8.4% on real reserves. ✓ 8. Cap rate: 7.8% (rebuilt). ✓ 9. Kill criteria: none fail. ✓ 10. Inspection contingency: 10 days requested. ✓ 11. Title + earnest: standard. ✓ 12. Pre-approval letter: attached. ✓

All 12 pass. Submit offer at $208K (3% below asking). Acceptance probability moderate.

Total time: 45 minutes. Result: a real underwritten deal you can defend.

Run this in Vricko

Vricko pre-computes items 1, 2, 3, 4, 5, 6, 7, 8, and 9 from a single address input. The remaining items (inspection terms, title, pre-approval) live in your contract template — also one-click to attach.

Try Vricko →

When to deviate from the checklist

Almost never. The checklist is designed to catch the mistakes you'd make under pressure or excitement. The instinct to skip an item is usually the instinct that gets you in trouble.

If you must deviate, document why. "Skipped item 3 (insurance) because property is in interior Texas, not coastal — using listing line." That's a reasonable note. "Skipped item 6 (DSCR stress) because the seller is motivated and I want this deal" is the note that costs you $40K.

Keep reading

• The 8 Numbers Every Deal Must Pass
• When to Walk: 7 Quantifiable Kill Criteria
• Every Seller Pro Forma Is a Marketing Document

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