Property Analysis Metrics | DealCheck Help Center

Property Purchase

Total Cash Needed

The total amount of cash you will need to purchase and rehab a property.

Written by Cindy Bellford
Updated over a week ago

Total Cash Invested

The total amount of capital you have invested in a property.

Written by Cindy Bellford
Updated over a week ago

Purchase Criteria

1% Rule (Rental Properties)

States that the ratio of monthly gross rent to the purchase price should be 1% or higher.

Written by Cindy Bellford
Updated over a week ago

2% Rule (Rental Properties)

States that the ratio of monthly gross rent to the purchase price should be 2% or higher.

Written by Cindy Bellford
Updated over a week ago

50% Rule (Rental Properties)

States that operating expenses should be less than or equal to 50% of the operating income.

Written by Cindy Bellford
Updated over a week ago

65% Rule (Flips)

States that the purchase price of a flip should be less than or equal to 65% of its ARV, minus the rehab costs.

Written by Cindy Bellford
Updated over a week ago

70% Rule (Flips)

States that the purchase price of a flip should be less than or equal to 70% of its ARV, minus the rehab costs.

Written by Cindy Bellford
Updated over a week ago

Financing

Loan Interest

The portion of the loan payment that goes toward paying the interest on the loan.

Written by Cindy Bellford
Updated over a week ago

Valuation

Calculated ARV Estimate

Estimated ARV based on the average sale price of comps and the property's living area.

Written by Cindy Bellford
Updated over a week ago

Calculated Rent Estimate

Estimated gross rent based on the average listed rent of comps and the property's living area.

Written by Cindy Bellford
Updated over a week ago

Cash Flow (Rental and BRRRR Properties)

Vacancy Expense

The amount you will lose in a given time period due to vacancy.

Written by Cindy Bellford
Updated over a week ago

Operating Income

Total income generated by a property, less the vacancy expense.

Written by Cindy Bellford
Updated over a week ago

Operating Expenses

All expenses incurred while renting out a property, excluding loan payments.

Written by Cindy Bellford
Updated over a week ago

Net Operating Income (NOI)

Net income generated by a property, not accounting for loan payments.

Written by Cindy Bellford
Updated over a week ago

Cash Flow

The total net amount you will receive from a rental property as income.

Written by Cindy Bellford
Updated over a week ago

Post-Tax Cash Flow

The total net rental cash flow after subtracting the estimated income tax.

Written by Cindy Bellford
Updated over a week ago

Property Sale (Flips)

Total Profit

The total net amount you will receive as profit from a flip.

Written by Cindy Bellford
Updated over a week ago

Post-Tax Profit

The total net profit from a flip after subtracting the estimated income tax.

Written by Cindy Bellford
Updated over a week ago

Investment Returns

Capitalization Rate (Cap Rate)

A rate of return that compares the yearly NOI to the purchase price or market value.

Written by Cindy Bellford
Updated over a week ago

Cash on Cash Return (COC)

A rate of return that compares the yearly cash flow to the total invested cash.

Written by Cindy Bellford
Updated over a week ago

Return on Equity (ROE)

A rate of return that compares the yearly cash flow to your total equity in the property.

Written by Cindy Bellford
Updated over a week ago

Return on Investment (ROI)

The total return on your invested cash if you were to sell the property.

Written by Cindy Bellford
Updated over a week ago

Internal Rate of Return (IRR)

An average annualized rate of return on your invested capital.

Written by Cindy Bellford
Updated over a week ago

Financial Ratios

Rent to Value (RTV, RTP)

A ratio that compares the monthly gross rent to the purchase price or market value.

Written by Cindy Bellford
Updated over a week ago

Gross Rent Multiplier (GRM)

A ratio that shows the number of years it will take for the yearly rent to add up to the purchase price.

Written by Cindy Bellford
Updated over a week ago

Equity Multiple

A ratio that shows the total return on your invested cash if you were to sell the property.

Written by Cindy Bellford
Updated over a week ago

Break Even Ratio (BER)

The minimum occupancy needed to cover all operating expenses and loan payments.

Written by Cindy Bellford
Updated this week

Loan to Cost Ratio (LTC)

The ratio between the loan amount and the acquisition costs of a property.

Written by Cindy Bellford
Updated over a week ago

Loan to Value Ratio (LTV)

The ratio between the loan amount and the market value of a property.

Written by Cindy Bellford
Updated over a week ago

Debt Coverage Ratio (DCR, DSCR)

A ratio that compares the yearly NOI to the yearly loan payments, often used for loan qualification.

Written by Cindy Bellford
Updated over a week ago

Debt Yield

A ratio that compares the yearly NOI to the total loan amount, often used for loan qualification.

Written by Cindy Bellford
Updated over a week ago

Miscellaneous

Total Equity

The actual portion of a property's market value that you own.

Written by Cindy Bellford
Updated over a week ago

Depreciation

Common income tax deduction available to real estate investors.

Written by Cindy Bellford
Updated over a week ago