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THE DEED BRIEF
📊 LAST WEEK’S RESULTS
Last week’s results: #1 hurdle = Rehab/contractor risk (71%); runner-up = Finding cash-flow at list (14%).
⏳ TL;DR
Q: What should I change in my underwriting for 2026—today?
A: Three fast moves: (1) Model state rule changes now (see Investor Corner). (2) Re-bid scopes before offers—contractor risk was your #1 hurdle last week. (3) Use conservative rent + vacancy and keep credits for payment relief, not price vanity.
WHAT MOST INVESTORS MISS
Compliance is a line item: appliance packages in CA, rent-cap ceilings in OR, deed-alert enrollment in IL, admin time on DC stabilized units.
Contractor risk is solvable up-front: tight scopes + milestones beat “lowest bid.”
🧲 MARKET CHECK (INVESTOR INTEL)
Interest Rates: 30-yr loans ~6.18% Freddie Mac
Months of Supply: 4.2 months NAR
2026 Forecast Snapshot
| 2026 Realtor.com Forecast | 2025 Realtor.com Full-Year Expectations | 2024 Historical Data | 2013–19 Historical Average |
Mortgage Rates | 6.3% (avg); | 6.6% (avg); | 6.7% (avg); | 4.0% (avg) |
Existing-Home Median Price Appreciation (YoY) | +2.2% | +2.0% | +4.5% | +6.5% |
Existing-Home Sales (YoY | Annual Total) | +1.7% | +0.1% | -0.6% | +2.1% |
Existing-Home For-Sale Inventory (YoY) | +8.9% | +15.2% | +15.2% | -3.6% |
Single-Family Home Housing Starts (YoY | Annual) | +3.1% | -4.3% | +6.9% | 0.77 million |
Homeownership Rate | 64.8% | 65.1% | 65.6% | 64.2% |
Rent Growth | -1.0% | -1.4% | -0.6% | +5.2% |
🏡 THIS WEEK’S MOVE
Contractor Selection + Scope Control (reader request)
Goal: Turn “contractor risk” into a checklist you can run in 10 minutes.
1) Shortlist (before walk-through)
2–3 licensed + insured GCs who’ve closed investor jobs in your ZIP in last 12 months
Ask for: last 3 addresses, scope summaries, final invoices, lien releases, insurance certs
2) Scope it tight (on the walk)
Write a room-by-room list (materials grade, SKUs if you have them)
Mark must-do vs nice-to-have; get a base scope + alternates price
3) Bid apples-to-apples
One page bid cover: start/finish dates, milestone schedule, retainer 10%, change-order form, who buys what (you vs GC), warranty terms
4) Pay for progress, not promises
Release draws only at milestones (demo complete; roughs passed; drywall hung; final punch + Certificate of Occupancy)
Require lien waivers with each draw; final payment only with final lien release
5) Scope control = success
Fix price to the written scope; every change = change order signed before work
Track on-time / on-budget by milestone; green/yellow/red simple dashboard
Save this: “Contractor risk lives in vague scopes and front-loaded payments.”
🧑💻 INVESTOR CORNER
2026 RULES TO UNDERWRITE NOW
Why it matters: These flip on Jan 1, 2026 (or are active for 2026 budgets). Model them before you offer.
What changed + your move
California — AB 628 (appliances = habitability). Landlords must provide/maintain a working stove + refrigerator.
Move: add appliance package to make-ready CapEx and small annual OpEx; update leases.Illinois — Anti-squatter & deed-fraud protections. Faster removal of unlawful occupants + county deed-fraud alerts mandated by Jan 1, 2026.
Move: enroll deed alerts for each parcel; tighten vacancy security SOPs.Oregon — 2026 rent cap = 9.5%. (Lower of 7% + CPI or 10%; OHCS posted 2026 cap.)
Move: cap Year-2/3 rent growth at ≤9.5%; re-test DSCR.Washington, DC — Rent-stabilization updates (phased through 2026).
Move: confirm coverage/exemption; collect seller’s last 3 filings; calendar allowable increase windows.
By State Snapshot
Metro | Quick read | Underwrite like this |
|---|---|---|
California | Appliance mandate. | Add $1.2–2.0k make-ready for stove+fridge; $8–12/mo reserve; lease update. |
Illinois | Deed-alerts + swifter removal. | Enroll alerts per parcel; assume 1–2 weeks security/turn padding. |
Oregon | 9.5% rent cap. | Limit growth ≤9.5%; use 4–6% conservative Year-1 refill; re-check DSCR. |
Washington, DC | Stabilized admin tweaks. | Verify exemption; add property-management (PM) admin time; request filings at letter of intent (LOI). |
🔎 DEAL DECODER
FLIP RISK - IN 5 NUMBERS
IMPORTANT: Read the Home Flipping Report
Use this mini-grid before you chase ARV.
Check | Green | Yellow | Red |
|---|---|---|---|
Hold time (mo) | ≤4 | 5–6 | ≥7 |
Gross margin | ≥18% of ARV | 12–17% | <12% |
Comp velocity | Median DOM ≤30 | 31–45 | >45 |
Cost certainty | 2+ firm bids, milestones | 1 firm bid | Allowances/“TBD” |
Exit options | Rent covers PITI @ -$0–$100 | -$101–$200 | Worse than -$200 |
If any cell is Red, you don’t have a flip—you have a maybe rental. Re-underwrite as a hold or pass.
🎯 ONE ACTION (90 seconds)
Name a saved search “Q1 – Contractor-ready”. For each match, run the Contractor + Scope checklist before offering, then layer in the 2026 rule impacts from your state. That’s how you turn “rehab risk” into a win.
🌐 ADDITIONAL SOURCES
Freddie Mac PMMS – Mortgage rate weekly.
NAR – Inventory & months of supply.
Apartment List – National Rent Report.
ATTOM – Q3 2025 Home Flipping Report.
California AB 628 (official) – Appliance requirement.
Illinois – Anti-squatter & deed-fraud alert legislation.
Oregon OHCS – 2026 rent cap bulletin.
DC DHCD – Rent stabilization program updates.
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⚖️ COMPLIANCE
Education for real estate investors, not financial/legal/tax advice. Investment property taxes and insurance requirements vary significantly by location. Always verify non-homestead rates and landlord insurance requirements before making offers.
Until next time,
Your 10-minute real estate playbook starts here
