Six ways to make money on a property — and the one number that decides each.

Buy & Hold

Buy a property, rent it out, and keep it over time. Your rental income must cover vacancy, operating expenses, money set aside for major replacements, and loan payments.

Cash flow is the money left after those amounts. A positive result means the property is projected to produce cash; a negative result means you must contribute money to keep it running.

Cash-on-cash return compares your annual cash flow with the cash you invested. For example, $8,000 of annual cash flow on an $80,000 investment is a 10% cash-on-cash return.

Property appreciation and mortgage paydown can also build wealth, but they are different from cash you can spend each month. Test lower rent, longer vacancies, and higher expenses before relying on the projection.

The math that decides it

Everything starts with net operating income — the rent, minus everything except the mortgage and the replacement reserve.

From NOI, four numbers follow, and each answers a different question.

What to watch

• DSCR below 1.00 — the rent does not cover the mortgage and you are funding the property out of pocket every month. Lenders on investment property commonly look for 1.20 or better.
• A loan constant above the cap rate — the debt costs more per dollar borrowed than the property yields on the whole price. That is negative leverage, and it is a financing problem rather than a property problem. Cash-on-cash below the cap rate is a rougher version of the same signal, but it also falls below on deals where the leverage is fine and the closing costs are simply heavy — and on an all-cash purchase, which has no leverage to be negative.
• A break-even ratio near 100% — almost every dollar of rent is already spoken for. The line under the ratio says how far rent can fall before the property costs you money; near 100% that is little or nothing, and above 100% the property loses money even fully let.
• Missing line items — a rental with no vacancy, maintenance, management or capital reserve budgeted is not a good deal, it is an incomplete one. Those costs arrive whether or not you wrote them down.

Flip

Buy a property, improve it, and sell it. Your profit is the expected selling price minus the purchase price, renovation costs, closing costs, loan fees, interest, holding costs, and selling costs.

Holding costs continue while you own the property. They can include taxes, insurance, utilities, and other project expenses. A delay can reduce profit even if the renovation budget stays unchanged.

The 70% or 80% rule is a rough screening shortcut. It does not replace the detailed cost calculation or guarantee a profit.

ROI compares projected profit with your own cash required for the project. Borrowing more can increase the percentage return while also increasing financing costs and risk.

The math that decides it

A flip is priced backwards from the resale value, not forwards from the asking price. Start with the after-repair value, subtract what you want to make and what it costs to get there, and what remains is the most you may pay.

Then the actual deal is checked against total project cost, which is a longer list than most people expect.

What to watch

• How much of the resale value is already spent — the higher that share, the less room a soft market or a two-month overrun leaves you. Around 70–75% is a rule of thumb some flippers use, and it is only that: it comes from a particular kind of deal — a retail resale, financed, with a full commission — and it travels badly to cash purchases, to wholesale exits, to high-value properties where the fixed costs are proportionally smaller, and to markets moving quickly in either direction. Work out the room you actually need for this project rather than reaching for the number. Read whatever figure you settle on against the All-In metric on the Flip screen, which includes commission and resale closing costs; the Total Project Cost figure beside it stops at the purchase side and will look several points friendlier.
• Project months — this is the number people understate. Holding costs and loan interest are charged monthly and do not care that the permit took longer than expected. Run it at your realistic timeline, then run it again two months longer.
• An ARV taken from the listing — the after-repair value should come from what comparable finished properties actually sold for, not from what the seller hopes theirs is worth.
• Return on a fully financed deal — borrowing 100% of a flip produces enormous percentage returns on almost no cash, and those percentages tell you very little. Look at the dollar profit and the margin, not the ROI.

BRRRR

Buy, Rehab, Rent, Refinance, Repeat. Buy a property, improve it, rent it out, and replace the original financing with a new loan based on the lender’s approved value and terms.

The refinance money first pays off existing loans and refinance costs. Any amount left can return some of your invested cash. If the new loan is not enough, you may need to contribute additional money.

Getting your cash back does not mean the investment is profitable. The rent must still cover operating expenses, replacement reserves, and the new loan payment.

The amount available depends on the appraisal, lender requirements, interest rate, and any required waiting period. Refinance proceeds are borrowed money, not sale profit.

The math that decides it

The whole strategy turns on one figure: how much of your cash the refinance gives back.

Once refinanced it is a rental, and it has to survive the buy-and-hold tests on the new loan — which is larger than the one it started with.

What to watch

• The appraisal — every figure above depends on an ARV that a third party has to agree with. If it comes in 10% low, the cash back falls by more than 10%, because the payoff amount does not move.
• DSCR after the refinance — you have deliberately increased the loan. A property that cash-flowed at the purchase loan may not at the refinance loan, and the lender will check this before funding.
• The seasoning period — most lenders will not refinance at the new value immediately. Budget the holding costs for that wait.
• Rate at refinance — unknown when you buy. Worth running at a rate materially higher than today's before committing.

Reverse Offer

Start with the return you want, then work backward to estimate the highest purchase price that meets it.

For a rental, the calculator uses expected income, expenses, financing, and upfront cash costs. For a flip, it subtracts the desired profit and the costs needed to complete and sell the project.

The answer depends on the assumptions entered. Changing the rent, repair budget, loan terms, or project length changes the price you can afford to pay.

Sometimes no purchase price meets the target. In that case the app explains why instead of displaying a price that does not achieve the requested return.

Check the percentage label carefully: a profit target based on selling price is different from one based on project cost.

The math that decides it

It runs the other calculations in reverse. Fix the return, solve for price.

What to watch

• The target you set — this is an input, not a result. Setting it at 12% because that sounds good will tell you that almost nothing is worth buying. Set it to what you could actually get elsewhere.
• Interest rate sensitivity — at high leverage a one-point move in the rate moves the maximum offer more than most people expect. Run it at a rate above your quote.
• The number is a ceiling, not a target — it is the most you may pay and still hit your return. Paying exactly it earns exactly your minimum.

Business & Commercial Acquisition

Buying an income-producing building and buying an operating business require different checks.

For a commercial building, review rental income, vacancy, operating expenses, major replacements, and financing. A cap rate helps compare the building’s income with its price.

For an operating business, review earnings after allowing for the work the owner performs. If you need to pay yourself or hire someone to do that work, include the appropriate compensation without counting the same expense twice.

The loan-sizing calculators estimate how much debt the income could support under the terms entered. They do not establish market value or guarantee lender approval. Loan-program limits and other lending requirements may reduce the available financing.

What is different

Value follows income, not comparables. If you raise NOI by $10,000 in a market that prices at a 7% cap, you have created roughly $143,000 of value. The same works in reverse when a tenant leaves.

Owner labor is not free. If the seller runs the business themselves, their unpaid work is quietly inflating the profit. Whatever it costs to replace them has to come out before the income is comparable to a passive investment.

What to watch

• Payroll being replaced — deduct a real market salary for the seller's role. A business that only works because the owner works 60 unpaid hours is priced on a fiction.
• Cap rate on the exit, not just the entry — you are buying at today's cap rate and selling at an unknown one. A deal that only works if cap rates compress is a bet on the market, not on the asset.
• Tenant concentration — one tenant at 40% of income is not the same risk as ten at 4%, even at identical NOI.
• Deferred maintenance — a roof or a parking lot at the end of its life is a price adjustment, not a surprise for later.

Hold & Exit

Estimate what happens when you keep a property for several years and then sell it. Every other number on this page describes the first twelve months; this one answers what you made over the whole hold.

The projection combines annual cash flow with the money left from the sale after selling costs and the remaining loan balance. It also accounts for your initial investment and any additional money you must contribute during the hold.

The equity multiple shows how much money comes back compared with everything you put in. A 1.5× multiple means $1.50 returned for every $1 invested.

IRR expresses the projected return as an annual rate while accounting for when money goes in and comes back. Earlier cash receipts can change the return substantially, so a larger total multiple does not automatically mean a better annual return.

Appreciation, rent growth, and expense growth are assumptions. The displayed returns are before income taxes and taxes arising from the sale.

The math that decides it

Three streams, added together and measured against what went in.

From those, two figures do the comparing.

What to watch

• Appreciation is a guess — and it is doing more work in the answer than anything else on the screen. Run the same deal at zero appreciation. If it only works because the market goes up, it is a bet on the market, not on the property.
• The early years carry the transaction costs — commission and closing costs come off the top at both ends, which is why the break-even year is worth looking at. Results depend on the purchase price, financing, operating performance, project costs, and selling conditions. Compare realistic scenarios rather than relying on a rule of thumb.
• A loan that ends inside the hold — check whether it finishes or merely matures. A twenty-year note that fully amortizes and is held for thirty leaves ten years with no mortgage payment at all. A loan that matures before it amortizes leaves a balloon balance due on that date instead, to be paid off or refinanced. The two look alike on a payment schedule and are opposite in their effect on the back end.
• None of it is after tax — depreciation helps, recapture and capital gains hurt, and a 1031 exchange changes the question entirely. Every figure here is pre-tax.

Holding an income property bought as a business works the same way, with one difference that changes the answer: it is sold on a cap rate applied to its own final-year income, not on an appreciation percentage applied to what you paid. The business screen asks for that cap rate instead.

An operating business, or one sold with its building, is sold on a multiple of its owner-operated earnings instead, and the business screen asks you for that multiple: no single figure holds across industries, so none is filled in.