Reading a NO_GO: When to Walk Away
Learn to trust the numbers when a deal looks good on the surface but fails analysis.
The Tempting Deal
A friend tells you about a 'great deal' — 4BR/2BA for $180K, 'needs just paint and carpet', ARV $240K. Sounds like a $60K equity play. You run it through Kaison.
Try it in Kaison
Quick Check: $180K purchase, $240K ARV, $15K rehab, 9% LOC.
The Reality Check
You walk the property with a contractor. 'Just paint and carpet' becomes: foundation crack ($12K), outdated electrical panel ($4K), water heater replacement ($2K), HVAC needs servicing ($1.5K), plus the cosmetic work ($15K). Real rehab: $34.5K.
Try it in Kaison
Full analysis with the real numbers.
The Verdict
Score: 41. Verdict: NO_GO. Two critical flags: 'P90 cost basis exceeds ARV' and 'P90 DSCR below 1.0'. At P90 (rehab runs 15% over, timeline slips 30%), your all-in cost is $243K — $3K MORE than the property is worth. You'd be underwater from day one.
The Lesson
The deal that 'just needs paint and carpet' almost cost you $40K+. The gap between the friend's estimate ($15K rehab) and reality ($34.5K) is why you run the numbers. Kaison's NO_GO saved you from a deal that looks good on a napkin but fails under scrutiny.
Educational content only. Consult a CPA or attorney for advice specific to your situation.