Investment first pass
Does the deal
survive the numbers?
Change the assumptions. See what holds up.
Illustrative example · not a listed property
01 / Your assumptions
Capital, reserves & hold period
Expenses should include property tax, insurance, management, maintenance and owner-paid utilities. Exclude debt service, depreciation and capital improvements. Fixed-rate, monthly principal-and-interest model.
02 / The first pass
Annual estimates- Cap rate
- 8.88%
- DSCR · NOI basis
- 1.56x
- Annual debt service
- $28,443
- Cash flow after reserve
- $12,957
- Cash-on-cash
- 7.40%
- Initial equity required
- $175,000
Debt $375,000Equity $175,000
Positive modeled cash flow still depends on collecting the income, controlling costs and funding the capital plan. Check rent evidence, insurance, tax exposure and near-term capital work.
How the estimates are calculated
NOI = scheduled income × (1 − vacancy) − operating expenses. Cap rate = NOI ÷ purchase price. DSCR = NOI ÷ annual principal and interest. Cash flow = NOI − debt service − annual replacement reserve. Cash-on-cash = cash flow ÷ initial equity. Initial equity includes the down payment, closing costs, initial improvements and initial cash reserves.
Lender DSCR definitions can differ. The annual reserve reduces cash flow but is excluded from NOI here. Initial reserves remain cash and are included in equity once. Hold period does not imply appreciation, a projected return or sale proceeds.
Estimated balance at 10-year maturity: $317,910. Estimated balance at 7-year hold: $339,061.
First-pass estimates only. No legal, tax, accounting, lending, appraisal or securities advice. Verify all inputs with appropriate professionals. This tool does not predict performance, approve financing or recommend a purchase.