The House TruthROAD Act · Operators
For SFR operators and property managers: renovations first, proof always
The rule rewards real systems work. Here's how a hypothetical home moves from buy walk to lease-ready with a record behind it.
Treasury's proposed rule gives operators a path to keep buying distressed single-family homes, as long as the homes are truly rehabilitated. For property managers, it means homes that arrive with core systems fixed and documented, and fewer surprise failures after move-in.
Here is how the math works on a hypothetical house. All numbers below are hypothetical.
The property sells for $200,000. The tax-assessed land value is $40,000, so the purchase price of the home under the rule is $160,000. The 15 percent spending test is $24,000 in total improvements, and cosmetic work counts toward it. The 10 percent safe harbor is $16,000 spent on structural or core-system work, with all material deficiencies resolved.
Now the house. On the buy walk, an independent walker finds a failing electrical panel, leaking supply lines, a rotten subfloor at the bath and missing smoke alarms. Each finding becomes a line on the scope, marked as core system or fit and finish. Paint, floors and fixtures go on the scope too, because they count toward the 15 percent.
As work moves, every draw is checked line by line against that scope: Complete, Pending, Explain or Refund. A panel replacement is not paid as a lump sum. It is paid as a line that was requested, receipted and verified.
In development for V1.1, a pre-cover walk captures the plumbing and electrical before drywall goes up, weekly progress walks follow the job, and a final lease-ready video walk documents the finished home for the property manager.
At the end, the record packet holds what the rule asks for: the deficiency at purchase, the scope, the receipts, the verified walks and the threshold math.
That's what Eyes On the House™ (patent pending) is for. Renovations first, and proof that holds up later.
Book a buy walk on your next acquisition.
Example numbers are hypothetical and for illustration only. This page describes a proposed rule for general information. It is not legal or tax advice.