Underwriting template
The model we run before we make an offer.
This is not a marketing calculator that tells you every property is a great investment. It is the same engine behind our deal pages, with the same assumptions and the same conservatism — and it will tell you plainly when a deal does not work, and what price would fix it.
DSCR is the first gate
If stabilized NOI does not cover debt service at the lender’s minimum — usually 1.20x to 1.25x — nothing else matters. The deal is not financeable at that price and that leverage.
Compare the cap rate to your interest rate
If the going-in cap rate is below the loan rate, you have negative leverage: every dollar borrowed reduces your return. Sometimes that is an acceptable bet on rent growth. Usually it is a bad deal wearing a good story.
Underwrite the rent you can prove
The single most common way a pro-forma lies is by putting year 1 at full market rent. Units turn over gradually. This model blends the first year and only reaches market in year 2.
Pre-loaded with 30–32 Dewey Road, Shrewsbury — a real listing we screened and passed on. Change any input to run your own property.
Assumptions
Purchase
Rent roll
Debt
Operating expenses
Hold & exit
Sponsor terms
Verdict
Fails DSCR — 0.70x against 1.20x required
At this price and leverage the property does not carry the debt. It clears at a purchase price of $426,097, or by cutting the loan to $319,573 and raising more equity.
Investor equity
$302,145
75% LTV
Loan amount
$547,425
64% of total cost
Stabilized NOI
$32,968
4.52% cap rate
Stabilized DSCR
0.70x
needs 1.20x
Avg cash-on-cash
0.0%
investor, from operations
Equity multiple
0.36x
over 5 years
Investor IRR
-18.6%
Breakeven occupancy
115%
Bidding instruction
Max price at 1.20x DSCR
$426,097
$303,803 below your price.
Max loan at your price
$319,573
$227,852 less than you assumed.
Cash flow projection
| Year | EGI | Op. exp. | NOI | Debt service | Cash flow | DSCR |
|---|---|---|---|---|---|---|
| Year 1 | $60,040 | ($31,288) | $28,752 | ($47,062) | ($18,309) | 0.61x |
| Year 2 | $66,120 | ($33,152) | $32,968 | ($47,062) | ($14,094) | 0.70x |
| Year 3 | $68,104 | ($34,146) | $33,957 | ($47,062) | ($13,105) | 0.72x |
| Year 4 | $70,147 | ($35,171) | $34,976 | ($47,062) | ($12,086) | 0.74x |
| Year 5 | $72,251 | ($36,226) | $36,025 | ($47,062) | ($11,037) | 0.77x |
Want us to run this on a property you are looking at?
Send us the listing. We will underwrite it properly — rent comps, real expense loads, current financing terms — and tell you what we would pay for it, whether or not you buy it through us.