The long term vs mid term vs short term rental decision is usually made before closing and defended afterward. Carlos White, managing partner of CRW Holdings in central Alabama, runs it the other way: he prices the same house at all three rent levels during underwriting, attaches a separate renovation budget to each, and buys when more than one of those exits clears. On one Birmingham house that supported roughly $1,100 a month long-term, he also priced it at about $2,200 mid-term and $3,600 short-term before committing.
That gives him a usable question at the offer stage: how many outs does this property have if the first operating plan underperforms? It’s a different question than “what’s my cap rate,” and it changes what you buy, how you spec the rehab, and what you pass on.
Below is the sequence — the three-rent underwrite, the per-exit rehab budget, the buy box that keeps exits open, his deal-screening order, how he fills units, and the financing and accounting constraints that cap the whole model.
Key takeaways
- Price every candidate house at all three rent models before you offer. White’s Birmingham example: ~$1,100 long-term, ~$2,200 mid-term, ~$3,600 short-term on the same property.
- Carry a distinct renovation budget per exit, in the $10,000-$15,000 range each. Furnished exits need durable materials; a long-term hold can take a lighter medium rehab.
- White’s buy box is narrow on purpose: 3/1s where a bedroom or bath can be added, or 2/1s with unusual square footage — a 1,500 sq ft 2/1 has room for a closet or full bath at roughly $5,000-$10,000.
- Run the numbers through an analyzer at the wholesaler’s asking price first, counter with the price that works, and go sight-unseen when it clears. Contract to close in 30-35 days, with 45 days as a hard walk-away line.
- Keep a third-string contractor. Trades you don’t keep busy leave, and White has seen crews come back pricing 10% above what they used to charge.
From the Real Estate Pros Show
This article draws on an interview with Carlos White of CRW Holdings on the Real Estate Pros Show, hosted by Scott Bursey.
Why One Rent Number Isn’t Enough Underwriting
White underwrites for optionality, not for a single operating model. On a Birmingham single-family that pencils to about $1,100 a month long-term, he also asks what it does as a mid-term rental — roughly $2,200 in his experience — and as a short-term rental, closer to $3,600. If only one of those numbers clears his threshold, the deal is thinner than it looks.
His framing: “I’m looking at how many outs did I have just in case this property doesn’t do as well as I want it to.” That is a risk question dressed up as a rent question. A house that only works as a short-term rental is a house that depends on one regulatory regime, one booking platform and one seasonal demand curve staying put.
He has lived through the whipsaw. He built up to seven or eight Airbnb doors at one point, then dialed the short-term side down as his W-2 career demanded more attention and pivoted into mid-term, then long-term rentals — duplexes and quadplexes, more doors under one roof. Margins on short-term compressed when everyone crowded in during COVID. Now that they’ve recovered in decent markets, he’s easing back in: his Tuscaloosa single-family short-term rental booked roughly $5,000 in its first month with the calendar opened September 1, on football season demand.
The point is not that short-term wins. It’s that the operator who underwrote all three exits could pivot each time without selling. The one who underwrote only the highest number had to.
Building a Separate Rehab Budget for Each Exit
Three rent models mean three finish levels, so White carries a renovation budget for each out — roughly $10,000 to $15,000 per scenario — and picks the one whose combination of cost and rent works best. He runs those scenarios through the same analyzer he uses on price, so the comparison is medium-rehab-plus-long-term-rent against furnished-spec-plus-mid-term-rent, not a guess.
The hold decision sets the spec. If he intends to keep the property, he buys more durable materials up front, because he wants the option to furnish it and run it as a short-term or mid-term rental later. Flooring, fixtures and surfaces that survive weekly turnovers cost more than what a long-term tenant on a two-year lease needs. If the house is staying long-term, a lighter medium rehab is the right answer and spending up is wasted.
Whether the property sits in a path-of-progress area feeds directly into that call. White tracks city plans and attends city council meetings specifically to find those pockets — he’ll buy land there that can eventually be rezoned for multifamily, years before he has the financing to break ground. A house in one of those pockets is a keeper, which means it gets the durable spec.
For any furnished exit, his wife handles design and sources the furniture, which is what makes the mid-term and short-term budgets realistic rather than theoretical. Without someone who can furnish a house on a known budget, the higher rent numbers in your underwrite are just numbers.
If I only can get $1,100 in rent on that, I might look into mid-term where I can probably get $2,200, and short-term where I can get $3,600. I’m looking at how many outs did I have just in case this property doesn’t do as well as I want it to. And I have a renovation budget for each out as well.
— Carlos White, CRW Holdings
The Buy Box That Keeps Exits Open
White’s filter is narrow and specific: 3/1s where an extra bedroom or bathroom can be added, or 2/1s with unusually large square footage. “If it doesn’t fit that buy box, I kind of leave it alone.”
The 2/1 case is the clearest example of how the box protects optionality. A 2/1 sitting on 1,500 square feet has wiggle room most 2/1s don’t. There’s space to carve out a closet and turn it into a 3/1, or add a full bath and make it a 2/2. His estimate for that work is an extra $5,000 to $10,000, and he says the value lift is out of proportion to the spend.
The reason this matters to a multi-exit underwrite: bedroom and bathroom count determines which rent models a house can serve at all. A one-bath house with three bedrooms is a hard sell to a traveling-nurse or relocation tenant paying mid-term rates, and it caps what a short-term listing can charge and how many guests it can sleep. Add the bath and the same building competes in all three markets.
Two rules make the box work. First, the addition has to be simple and code-compliant — he’s looking for layouts where the square footage already exists, not additions that require expanding the envelope. Second, he doesn’t force deals. His words on it: don’t make them work. He’s explicit that he now swings only at what looks like a home run, in part because he has a family and rates his own risk appetite at about three out of ten.
Screening Deals Fast: Numbers First, Property Second
Wholesalers send White deals constantly, so his screen is built to kill bad ones before they cost him time. The sequence:
- Run the asking price through the analyzer at face value. He uses BrickGrade.io. A wholesaler pitches at $45,000 or $40,000; the tool tells him whether it works before he looks at a photo or drives a street.
- Counter with the price that does work. “It doesn’t work at this price, but it works at this price.” That’s a specific number, not a negotiation dance.
- Go sight-unseen when the numbers clear. He’ll contract without walking it.
- Inspect anyway — but not to renegotiate. “Inspection doesn’t change the price. I just want to know what my headache is before I get into it.” That distinction is what makes him easy to sell to.
- Close in 30 to 35 days, with 45 as the ceiling. “If I can’t close within 45 days, I don’t want it.” No dragging to 60, 90 or 120.
Sellers he buys from are often retiring investors who want out cleanly, and removing their headaches is how he wins against buyers who retrade at inspection.
For context on why the three-exit math works in his market: Birmingham lets him buy a single-family around $50,000 and rent it near $1,100, and a 12-unit runs roughly $600,000 to $800,000. Those ratios are local. Running the same three-exit underwrite in a market where a house costs four times that much will produce very different answers about which exits clear.
Filling the Unit and Managing the Downside
Marketing starts a week or two before closing, not after the rehab. White lists the property through his property management platform, Rentiva.io, which syndicates the listing to Zillow and its partner sites including Redfin, plus Facebook. Leads come in, he qualifies them before sending an application, and the ones who pass get the unit.
On the construction side, the rule is that the property is vacant at closing and crews start day one. Overlapping marketing with rehab is where the vacancy savings actually live.
The threats he watches are on the cost side. Material and labor prices keep moving, and he shops supply houses and plumbing warehouses himself to track where the needle is. The contractor risk is sharper. His policy is a backup to the backup to the backup, because a trade you don’t keep busy will take a steadier job elsewhere — and when he comes back, the pricing has changed. White has seen a crew that once gave him a 20% haircut return asking 10% above their old rate.
His mitigation is presence and treating trades as partners rather than vendors. When he’s in the country, contractors might see him two or three times a day — morning, evening, and sometimes in the middle with lunch. His framing to them is that the job feeds both families. That relationship is also what lets him operate remotely; while deployed overseas, he flipped a property virtually, and he keeps people he can call for a leak without checking their work.
The Financing and CPA Constraints That Cap This Model
White’s constraint is capital, not deals. Wholesalers send him inventory nonstop; he barely markets for acquisitions at all. What he can’t do is fund everything that clears his box. He estimates a business line of credit — so he isn’t reaching for personal funds — could take CRW Holdings from seven doors to around 25 fairly quickly, because the pipeline already exists.
He’s also felt what happens when financing fails late. He had a roughly $1 million commercial property under consideration, four or five years old, from a retiring investor who needed out to care for a sick wife. The financing “got weird” near the end and he lost it.
What he sees changing: lenders raising their guardrails. Deals that once closed on the deal numbers alone now draw requests for reserves — in one case, 18 months of them. His response has been to lean into creative and owner financing and structure deals that work for both sides, rather than fighting conventional underwriting on rate. He’s also holding off on applying for more business debt until he likes the returns better.
His most expensive lesson had nothing to do with a property. He hired a generalist CPA instead of one focused on real estate, and by his own estimate that cost him five figures in tax savings he should have captured. He now handles the books himself and went and learned cost segregation, working with specialist firms to recover some of what he’d missed. Treat that as his experience, not a recommendation — but the pattern is worth noting before you hire.
Frequently asked questions
How do you decide whether a house should be a long-term, mid-term or short-term rental?
Price all three before you buy, then let the spread and the rehab cost decide. White’s Birmingham example puts the same house at roughly $1,100 long-term, $2,200 mid-term and $3,600 short-term, each paired with its own renovation budget — the comparison is rent minus the cost to reach that finish level, not rent alone.
His hold intent also weighs in. If the property sits in a path-of-progress area he plans to keep, he specs durable materials so the furnished exits stay available later, even if he starts it as a long-term rental.
What should I budget for renovation if I want to keep more than one rental exit open?
White carries roughly $10,000 to $15,000 per exit scenario on the single-family houses he buys in central Alabama, and compares those budgets against the rent each exit produces before choosing. The furnished exits cost more because they need materials that survive frequent turnover, plus furniture.
Scale those numbers to your own price point. On a $50,000 house they’re meaningful; on a $300,000 house a $12,000 medium rehab may not move rent at all.
What makes a 2-bedroom, 1-bath house worth buying instead of passing on?
Unusual square footage. White’s example is a 2/1 with about 1,500 square feet — enough interior space to carve out a closet or add a full bath for roughly $5,000 to $10,000 without expanding the building, converting it to a 3/1 or 2/2.
That conversion does two things: it lifts value substantially relative to the spend, and it widens the rent models the house can serve, since bed and bath count is what qualifies a property for mid-term and short-term demand.
How fast should a cash buyer be able to close, and when should you walk away?
White contracts to close in 30 to 35 days and treats 45 days as a hard ceiling — if it can’t close inside that window, he doesn’t want it. He won’t stretch to 60, 90 or 120 days.
He also separates inspection from price. He inspects to know what he’s inheriting, not to retrade the seller, which is part of why retiring owners and wholesalers bring him repeat business.
Does hiring a real estate-specific CPA actually matter for a small rental portfolio?
It mattered enough to be White’s most expensive business lesson. He used a generalist CPA and estimates the missed tax savings ran into five figures — he later taught himself cost segregation and worked with specialist firms to recover part of that liability.
That’s his experience with seven doors, not tax advice. If you’re evaluating a CPA, ask specifically what real estate work they do and how they’ve handled depreciation strategy for clients at your size.
The bottom line
Before you send your next offer, run the property at all three rent levels with a separate rehab number attached to each, and only sign if at least two of them clear. That single change to your underwriting is what turns an operating-model bet into a property you can pivot without selling.
