When to Walk: 7 Quantifiable Kill Criteria

TL;DR

✦ "I have a bad feeling" is not a kill criterion. Numbers are. ✦ Seven quantifiable thresholds. If a deal trips any one, you walk — no debate. ✦ Operators win not because they pick more deals. They win because they kill more deals faster. ✦ The kill criteria are the discipline that protects your portfolio at scale.

Why feelings don't scale

You will look at hundreds of deals. The "gut feel" rarely scales — you'll either get squishy and overpay on the deal that excites you, or you'll get paranoid and walk on perfectly fine deals.

What scales: pre-committed numerical thresholds. You set them once, in a calm moment, with no deal in front of you. Then you apply them mechanically when deals come in.

Below are seven criteria operators use. If your deal trips any one, the deal dies.

Criterion 1: DSCR < 1.20 at base, < 1.0 stressed

The lender's red line. Below 1.20 base, the loan reprices or denies. Below 1.0 stressed (rates +200bps), you can't survive a refinance cycle.

If you can't structure the deal so DSCR clears 1.20 base and 1.0 stressed, you don't have a deal. Walk.

Criterion 2: Cash-on-cash < 6%

The capital-velocity floor. Below 6%, your money grows faster in a different deal — or in the S&P. Locking $80K of capital at 4% CoC for 7 years before refinance is the slow death of a portfolio.

Some markets justify lower (Austin, Nashville with 6%+ appreciation). Even then, 4% CoC is the absolute bottom.

Criterion 3: Rehab budget overrun probability > 30%

This one needs a method. Pull contractor bids on three line items: kitchen, bathroom, roof. If your high bid is more than 30% above your low bid, the project has unknowns the contractors are pricing for.

Above 30% spread, your rehab budget is a guess. Walk unless you can re-scope.

Criterion 4: Days on market > 90 in a hot submarket

If a property has sat 90+ days in a market where median DOM is 20-40, something is wrong. Either the price is too high (sellers haven't capitulated), or there's a defect every other buyer found.

Properties don't sit by accident. Walk unless the seller drops the price meaningfully (10%+) or you uncover the reason and can price it.

Criterion 5: Seller refuses inspection or contingency periods

A seller who won't allow a 7-day inspection contingency is hiding something. Period. There is no other reason.

Off-market deals from wholesalers sometimes pressure you to skip inspection. Walk. The deals that survive inspection are the deals worth owning.

Criterion 6: Comp pull within 0.5mi shows < 3 sales in last 90 days

Thin comp data means the ARV is a guess. You can't verify your exit price without 3-5 comparable sales. Without comps, you're trusting the algorithm — and the algorithm doesn't know your submarket.

If you can't pull 3+ recent comparable sales, the deal is not underwriteable. Walk.

Criterion 7: Insurance binding quote > 1.4× listed insurance

If your binding quote comes back 40%+ higher than the listing's insurance line, the listing is using the seller's grandfathered policy. Your real expense is much higher.

In coastal Florida, wildfire California, and tornado Oklahoma, this often happens. Re-run the model with the binding quote. If the deal still works, proceed. If not, walk.

The walking framework: precommit, then mechanical

The discipline only works if you set criteria before the deal. Once you have a property in your hands, you'll start rationalizing.

Step 1. In a deal-free hour, write down your seven criteria with specific numbers. Step 2. Tape them to your monitor or save them in your CRM template. Step 3. When a deal comes in, run them mechanically. No subjective override. Step 4. If any one trips, walk. Move on. Next deal.

The "walking move" feels expensive in the moment — you spent hours on the deal. It feels cheap in the aggregate — operators who walk fast do 2-3× more deals per year because they don't sink time into deals that were never going to work.

Worked example: a deal you should walk

A duplex in Ohio. Listed $215K. Strong rents on paper.

• DSCR base: 1.31 ✓
• DSCR stressed: 0.94 ✗ TRIPS Criterion 1.

You walk. Don't run cash-on-cash. Don't pull comps. Don't agonize. The stressed DSCR fails. The next refinance kills the deal. Move on.

Total time on this deal: 8 minutes.

The hardest criterion to honor

Criterion 5 (no inspection contingency) is the one investors break most often, because they're chasing "the off-market deal of the year" from a wholesaler with a 24-hour deadline.

Almost every "off-market deal of the year" that skips inspection turns into a $30K-$80K rehab surprise within 60 days. The wholesaler's commission is locked in. Your loss is yours.

Walking on inspection is the test of whether you're an operator or a hobbyist with capital.

Run this in Vricko

Vricko's Underwriter trips visible flags when any of these seven criteria fail. The "kill" status is binary — green or red — so you don't second-guess.

Try the Underwriter →

Where this connects

The kill criteria are the operational discipline that lets you scale. Without them, you do 1-2 deals per year — the ones that excited you. With them, you do 6-12 deals per year — the ones that cleared a measurable bar.

Walking is not failure. Walking is the metric that proves your standards are real.

Keep reading

• The 8 Numbers Every Deal Must Pass
• The 60-Second Deal Screen
• 5 Red Flags That Kill Real Estate Deals Before You Offer

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