THE DEED BRIEF
🎯 THIS WEEK’S MOVE
What’s happening: “1 month free” and fee waivers are popping up while 30-yr mortgage quotes sit in the mid-6s.
Translation: Year-1 income isn’t the flyer—it’s effective rent.
Your play
✅ Calculate effective rent first (not the fantasy number).
✅ Plug that into your One-Minute Fit Check.
✅ If it turns Yellow → ask for seller credits to buy down the rate.
💡 Why you care: That “$2,100/mo” rental with a free month is actually $1,925/mo. Price it wrong and your “Green” deal is really Yellow in disguise.
📊 SNAPSHOT
Rates: Mid-6s. Boring = useful for pricing a buydown.
Supply: Still elevated vs last year → more negotiation room (market by market).
Rent side: “FREE MONTH” signs multiplying → net income dips in Year-1.
Your move: Calculate effective first. Negotiate second.
🔎 MINI DEAL DECODER
The “free month” trap
Setup: $445k ask; SFR comps say $2,100/mo. The apartments next door are advertising 1 month free.
Trap: Using $2,100 in your math.
Reality: (11 × $2,100) ÷ 12 = $1,925/mo effective.
Difference: $175/mo vanished ($2,100/year).
Fix
Run Fit Check with $1,925.
If Yellow → request ~2% seller credit.
Use the credit for a permanent buydown; re-check payback (<~24 months) to get back to Green.
Free Tools
👉 One-Minute Fit Check — quick Green/Yellow/Red
👉 Two-Call Diligence — county tax + landlord insurance = your real monthly
💰 EFFECTIVE RENT IN 60 SECONDS
What it is: The average monthly you actually collect after promos.
How to calc: (Paid months × asking rent) ÷ lease term
Example: “$2,000/mo with 1 FREE” → (11 × 2,000) ÷ 12 = $1,833/mo.
When to use itBuying: Underwrite Year-1 at effective; stabilize to market later.
Leasing up: A targeted concession can beat a permanent price cut—if your Fit Check stays Green.
Rule: If neighbors are giving concessions, assume you will too (at least initially).
🧭 CREDITS VS. POINTS — QUICK DECISION TREE
Holding 2+ years? → Buy points if payback < ~24 mo.
Need cash now? → Take credits.
Unsure? → Credits (more flexible).
This week’s ballpark: A 2% credit often buys ~0.50–0.75 pts; that’s ≈ $120–$170/mo on typical loan sizes (sanity-check with your lender).
🧩 MICRO-GLOSSARY
Effective Rent: Average monthly after promos (free month, fee waive).
Credits vs. Points (Payback Rule): Choose the path with faster, safer recovery of upfront cost.
5-handle: A mortgage rate that starts with 5% after a buydown (e.g., 5.99%).
⚖️ Compliance
This is education, not financial/legal/tax advice. Markets and rules vary by city/state/property. Validate local regulations, property taxes, insurance, and loan terms before acting.
READ NEXT:
📚 SOURCES
Freddie Mac PMMS — weekly 30-yr fixed trend (mid-6s)
Realtor.com — latest monthly inventory trends (YoY up; momentum varies by metro)
Zillow Research — concession share and rent-growth context
Until next time,
Your 10-minute real estate playbook starts here
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