Every formula is open. Every default is documented. No black box.
These metrics power every long-term rental analysis on Proformatic.
Annual income from the property after all operating expenses, but before debt service (mortgage payments).
Effective Monthly Income = Gross Rent + Other Income − Vacancy Loss. Operating Expenses include property tax, insurance, maintenance, management, HOA, utilities, and any custom expenses. Mortgage is excluded.
Measures the property's return independent of financing. Higher is better.
A 7% cap rate means the property generates 7% of its value in annual net income. Typical target: 5–10% depending on market.
Annual cash flow as a percentage of the total cash you put in (down payment + closing costs).
Total Cash Invested = Down Payment + Closing Costs. Target: 8–12%+ for a strong deal.
How many times your NOI covers your annual debt payments. Lenders typically require 1.25x or higher.
Annual Debt Service = Monthly Mortgage × 12. A DSCR of 1.0 means you exactly break even. Below 1.0 means the property doesn't cover its debt.
Quick ratio to compare properties. Lower is better — it means you're paying fewer years of rent for the property.
Percentage of effective income consumed by operating expenses. Lower is better.
Target: under 50%. Above 80% means almost all income goes to expenses.
This is what's left in your pocket each month after everything is paid. Target: $200+/month per unit.
Internal Rate of Return over 5 years, accounting for cash flow, appreciation, and loan paydown. Solved using the Newton-Raphson method on the NPV equation.
CF(0) = negative total cash invested. CF(1-4) = annual cash flow. CF(5) = annual cash flow + estimated sale proceeds (appreciated value minus remaining loan balance minus selling costs).
Metrics for evaluating fix-and-flip profitability.
Total Cash Needed = Down Payment + Closing Costs + Rehab Costs (adjusted for financing). Target: 15%+ per flip.
How much of the final sale price is pure profit. Target: 10%+.
Industry rule of thumb: your total investment (purchase + rehab) should be at or below 70% of the ARV to leave room for profit and unexpected costs.
At or below 70% = strong. 70–85% = risky. Above 85% = very tight margins.
Buy, Rehab, Rent, Refinance, Repeat. All rental metrics apply post-refi, plus these BRRRR-specific calculations.
New Loan Amount = ARV × Refi LTV%. The more equity you force through rehab, the more cash you recover.
The BRRRR goal is to get this to $0 or below — meaning you recovered all your cash and can repeat the process.
If Cash Left ≤ 0, this becomes an infinite return — you have no money in the deal and it's still cash flowing.
Built-in equity from forced appreciation through rehab. This is your margin of safety.
Every deal gets a composite score from 0–100, converted to a letter grade. The score is a weighted average of individual metric scores, each scaled 0–100. Here are the exact weights and thresholds.
| Score | Grade |
|---|---|
| 95+ | A+ |
| 90–94 | A |
| 85–89 | A- |
| 80–84 | B+ |
| 75–79 | B |
| 70–74 | B- |
| 65–69 | C+ |
| 60–64 | C |
| 55–59 | C- |
| 45–54 | D |
| Below 45 | F |
| Factor | Weight | Scoring scale |
|---|---|---|
| Cash-on-Cash Return | 30% | 0% = 0 pts, 8% = ~67 pts, 12%+ = 100 pts |
| Cap Rate | 20% | 0% = 0 pts, 5% = 50 pts, 10%+ = 100 pts |
| DSCR | 20% | <1.0x = 0–30 pts, 1.25x = ~65 pts, 1.5x+ = 100 pts |
| Monthly Cash Flow | 20% | Negative = 0–20 pts, $200 = ~50 pts, $500+ = 100 pts |
| Expense Ratio | 10% | 80%+ = 0 pts, 50% = ~67 pts, 35% or less = 100 pts |
| Factor | Weight | Scoring scale |
|---|---|---|
| Return on Investment | 30% | 0% = 0 pts, 15% = 50 pts, 30%+ = 100 pts |
| Profit Margin | 25% | 0% = 0 pts, 10% = 50 pts, 20%+ = 100 pts |
| Net Profit | 25% | Loss = 0 pts, $25K = ~55 pts, $50K+ = 100 pts |
| 70% Rule | 20% | 70% ratio = 100 pts, 85%+ = 0 pts |
| Factor | Weight | Scoring scale |
|---|---|---|
| Post-Refi CoC Return | 25% | Infinite return = 100 pts, 8% = ~53 pts, 15%+ = 100 pts |
| Cash Recovered at Refi | 25% | $0 left in deal = 100 pts, <$5K = 90 pts, >$50K = 20 pts |
| Post-Refi Cash Flow | 20% | Negative = 0–20 pts, $200 = ~50 pts, $500+ = 100 pts |
| DSCR | 15% | <1.0x = 0–30 pts, 1.25x = ~65 pts, 1.5x+ = 100 pts |
| Equity Captured | 15% | $0 = 10 pts, $25K = ~40 pts, $75K+ = 100 pts |
When you enter a purchase price, we auto-fill these starting values. Every one is overridable — they're starting points, not assumptions.
| Field | Default | Rationale |
|---|---|---|
| Monthly rent | You enter it | We never auto-estimate rent. You know your market better than any formula. Enter actual or expected rent based on your own research or comps. |
| Property tax | 1.1% of price | US national average. Ranges 0.3% (Hawaii) to 2.4% (New Jersey). Always verify with your county assessor. |
| Insurance | 0.5% of price | Baseline for standard coverage. Flood/hurricane zones will be higher. |
| Vacancy | 5% | Approximately 18 days/year. Conservative for most markets. |
| Maintenance | 5% of rent | Covers routine repairs. Older properties may need 8–10%. |
| Management | 8% of rent | Standard professional management fee. Include even if self-managing — your time has value. |
| Down payment | 20% | Conventional loan minimum for investment properties. |
| Interest rate | 7.0% | Approximate current market rate for 30-year investment property loans. |
| Closing costs | 3% | Typical buyer closing costs as percentage of purchase price. |
The projection chart models property performance over 10 years using adjustable growth assumptions.
| Assumption | Default |
|---|---|
| Annual rent growth | 3% |
| First-year rent growth | 0% |
| Annual expense growth | 3% |
| Annual property appreciation | 2% |
Year N property value = Purchase Price × (1 + Appreciation)^N. Rent compounds similarly. Loan balance follows standard amortization. All assumptions are editable in the projection chart.
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