creroom
Pro tool · The CREE Course, Chapter 5

Deal Meter

Troy's 21-point grade for a college-town apartment building. Put in what the listing says and the meter scores ten items, re-taxes the NOI at your price and checks the loan at today's bank rate. A missing number counts as missing, never as zero.

What it scores

  1. 1.Cap rate vs the bank loan rate0 to 3
  2. 2.Price per unit vs comps0 to 2
  3. 3.Distance to campus0 to 2
  4. 4.University size and growth0 to 2
  5. 5.Days on market and price cuts0 to 2
  6. 6.Value-add upside0 to 2
  7. 7.Occupancy0 to 2
  8. 8.In-place rents vs market0 to 2
  9. 9.Building age and condition0 to 2
  10. 10.Unit mix0 to 2

15 of 21 or more is an A (write an offer), 9 to 14 a B (watch it and negotiate), under 9 a C (pass). A deal missing 3 or more items is graded Incomplete, with its percent of the points it could score so you can still compare it. Each grade comes with a one-line reason and a loan check: the DSCR, the loan a bank would make and the cash-on-cash return.