Free tool · The CREE Course, Chapter 5
Deal calculator
Net operating income, cap rate, cash flow, cash-on-cash return and IRR for an income property, worked the way Troy teaches it. Change any number and everything updates.
Year one
Net operating income$234,150Effective gross income $339,150
Cap rate6.00%NOI / price
Cash flow$27,085After $207,065 of loan payments
Cash-on-cash return2.31%On $1,170,000 down
Debt coverage1.13Lenders usually want 1.25
Total return before taxes4.92%Cash flow plus $30,514 principal paid
The whole hold
IRR10.48%Cash flows and the sale
Equity multiple2.48x
Sale price$4,805,817Year 11 NOI at 6.25%
Cash back at sale$2,347,255After selling costs and the $2,314,388 loan
What it is worth at other cap rates
The same NOI divided by each cap rate. A lower cap rate means a higher price for the same income.
| Cap rate | 5.50% | 5.75% | 6.00% | 6.25% | 6.50% |
|---|---|---|---|---|---|
| Value | $4,254,298 | $4,069,452 | $3,900,000 | $3,744,096 | $3,600,177 |
Year by year
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Year 6 | Year 7 | Year 8 | Year 9 | Year 10 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Gross income | $357,000 | $367,710 | $378,741 | $390,104 | $401,807 | $413,861 | $426,277 | $439,065 | $452,237 | $465,804 |
| Vacancy | -$17,850 | -$18,385 | -$18,937 | -$19,505 | -$20,090 | -$20,693 | -$21,314 | -$21,953 | -$22,612 | -$23,290 |
| Other income | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Expenses | -$105,000 | -$109,200 | -$113,568 | -$118,111 | -$122,835 | -$127,749 | -$132,858 | -$138,173 | -$143,700 | -$149,448 |
| NOI | $234,150 | $240,125 | $246,236 | $252,488 | $258,881 | $265,419 | $272,104 | $278,939 | $285,925 | $293,066 |
| Loan payments | -$207,065 | -$207,065 | -$207,065 | -$207,065 | -$207,065 | -$207,065 | -$207,065 | -$207,065 | -$207,065 | -$207,065 |
| Cash flow | $27,085 | $33,059 | $39,171 | $45,422 | $51,816 | $58,354 | $65,039 | $71,873 | $78,860 | $86,001 |
| Cash-on-cash | 2.31% | 2.83% | 3.35% | 3.88% | 4.43% | 4.99% | 5.56% | 6.14% | 6.74% | 7.35% |
| Principal paid | $30,514 | $32,557 | $34,738 | $37,064 | $39,547 | $42,195 | $45,021 | $48,036 | $51,253 | $54,686 |
| Total return | 4.92% | 5.61% | 6.32% | 7.05% | 7.81% | 8.59% | 9.41% | 10.25% | 11.12% | 12.02% |
| Loan balance | $2,699,486 | $2,666,929 | $2,632,191 | $2,595,126 | $2,555,580 | $2,513,385 | $2,468,363 | $2,420,327 | $2,369,074 | $2,314,388 |
Before taxes. Equity is the down payment; closing costs are left out. For a saved analysis with PDF and Excel downloads, use Troy's full calculator at crecalculator.com. CRE Room members can download the Knox Street model it follows from the Library.