The DMV Investor's Guide
Every good deal in this market was underwritten before it was bought. This guide covers the vocabulary of investment real estate, the five equations we run on every opportunity, how the three core strategies compare, and the tax mechanics that separate real returns from paper ones.
Speak the language
What the property sells for once renovated — proven by renovated comps, not optimism.
Loan-to-cost and loan-to-value — how much of the project a lender funds. The rest is your cash.
Upfront lender fees — 1 point = 1% of the loan. Priced into every deal before we offer.
Short-term, asset-based financing for flips and builds. Fast and flexible; expensive by design.
Renovation or construction funds released in stages as work is inspected — your rehab budget's cash-flow calendar.
Rental income minus operating expenses — before the mortgage. The engine of every rental metric.
Debt service coverage ratio — NOI ÷ annual mortgage payments. DSCR lenders qualify the property, not your W-2.
NOI ÷ purchase price — the property's unleveraged yield, and the cleanest way to compare rentals.
Return on the actual cash you put in — the number that decides whether the deal beats your alternatives.
Buy, rehab, rent, refinance, repeat — recycling the same cash through multiple rentals.
An engineering study that front-loads depreciation by reclassifying components onto faster schedules.
Rolling sale proceeds into the next investment property to defer capital gains — timelines are strict.
The five equations we run on everything
A first filter, not an underwrite — it leaves room for costs and profit before you've modeled a thing.
Every cost, both closings included. Deals die in the lines people forget — carry, points and the sale itself.
Our bar for a strong flip: at least 8% ROI on total project cost and 30%+ cash-on-cash for the project.
Below 1.20 expect pricing adjustments; below 1.0 the property can't carry its own loan.
Strips out financing so two properties compare cleanly. Pair it with CoC to see the leveraged picture.
All five run live in the TBG Deal Analyzer at banksgroupdmv.com — fix & flip, new construction and DSCR rental, with full cost detail.
Three strategies, compared honestly
Depreciation: the return you don't see in cash
The IRS lets you depreciate a residential rental structure over 27.5 years — a paper expense that shelters real cash flow. The land never depreciates, on paper or in fact: it's the component doing the appreciating, which is why land share drives long-term returns for rentals just as it does for homes.
Cost segregation can front-load those deductions; a 1031 exchange can defer the gains when you trade up. Both have rules and real deadlines — model them with your CPA before you count on them.
We screen with the 70% rule, underwrite with the full cost stack, and hold every flip to our 8% ROI / 30% CoC bar. We match the strategy to your capital and timeline — not the other way around. And because we invest in this market ourselves, the deal you see has already survived the same math we run on our own money.
Malik Banks · 202.669.9634 · Malik@banksgroupdmv.com
Malik Banks, REALTOR® · The Banks Group · Brokered by eXp Realty, LLC · Licensed in VA, DC & MD · Equal Housing Opportunity. Educational material — not lending, legal, tax or investment advice.