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Real Estate

Appreciation Rate illustration
Return

Appreciation Rate

Shows percentage increase in value.

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Break-Even Occupancy Rate illustration
Income

Break-Even Occupancy Rate

Minimum occupancy needed to cover expenses and debt service.

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Capitalization Rate illustration
Valuation

Capitalization Rate

Measures property return from NOI and value.

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Cash-on-Cash Return illustration
Return

Cash-on-Cash Return

Compares annual pre-tax cash flow with cash invested.

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Rental property deal analysis

Run these in order to underwrite a rental or commercial deal end to end.

  1. 1Net Operating IncomeStart with income minus operating expenses.
  2. 2Capitalization RateTurn NOI into a market value / yield check.
  3. 3Property Value from NOIEstimate value from NOI and a target cap rate.
  4. 4Loan-to-Value RatioSize the loan against that value.
  5. 5Monthly Amortization PaymentCompute the monthly debt payment.
  6. 6Debt Service Coverage RatioConfirm the deal covers its debt.
  7. 7Cash-on-Cash ReturnMeasure the cash yield on your money in.
  8. 8Return on InvestmentFinish with the overall return.

Suggested roadmap

Estimate and bid a job

Build a job estimate from materials and labor, then bid and check the margin.

  1. 1Material Cost with WasteTotal materials with a waste allowance.
  2. 2Labor CostAdd crew labor cost.
  3. 3Bid PriceMark up cost into a bid price.
  4. 4Job Profit MarginConfirm the margin on that bid.

Suggested roadmap

Run a coffee, tea, or food shop

The core numbers a small food or retail franchise watches to stay in the black.

  1. 1Gross ProfitStart with revenue minus cost of goods sold.
  2. 2Profit MarginSee how much of each sales dollar you keep.
  3. 3Break-Even SalesFind the sales needed to cover fixed costs.
  4. 4Labor Cost PercentageKeep wages in check against sales.
  5. 5Inventory TurnoverTrack how fast stock sells through.