PERSONAL RENTAL INVESTMENT RESEARCH

Find the 1%.
Then check the cash flow.

Compare the purchase screen with what the rent must actually cover.

1%

Rent / purchase price

——

$

Monthly cash flow

—After debt and reserve

C

Total cash committed

——

R

Cash-on-cash

—Annual, including held cash

D

NOI / debt service

—Before capital reserve

Calculator

Starting values are examples. Replace them with your own quotes and estimates.

Rent, financing, taxes, insurance, repairs and closing costs are estimates until verified. A zero input does not establish zero cost.

Purchase & financing

Purchase price $ Monthly scheduled rent $/mo Down payment % Annual interest rate % Amortization years Mortgage insurance $/mo

What the rent must cover

Scheduled monthly rent—

Variable operating costs—

Fixed operating costs—

NOI before debt / capital—

Capital reserve—

Loan payment + mortgage insurance—

Monthly cash flow—

Break-even monthly rent—

Rent for target cash-on-cash—

Rent for target debt coverage—

NOI excludes debt and capital reserve. Cash flow includes both. Lenders may define coverage differently.

Operating assumptions

Vacancy % rent Management % rent Routine maintenance % rent Leasing allowance % rent Fixed costs: tax, insurance, utilities, HOA $/mo Capital reserve $/mo

Acquisition cash

Closing costs $ Repairs & contingency $ Pre-rent carrying costs $ Cash held in reserve $ Costs already paid $

Down payment—

Other cash committed—

Total cash committed—

Still to fund—

Rent & rate stress test

Monthly cash flow after reserve, with other assumptions held fixed.

Pass / fail screen

Coverage target ratio Cash-on-cash target %/yr

A passing screen still needs verified rents, costs, property condition and loan terms.