One number gets you the loan. The other tells you whether to take it.
Track 1 is rent against the payment, the number the lender funds on. Track 2 prices in vacancy, management and CapEx; when they disagree, it is the one that stops a bad deal.
Rent covers the note. Most desks stop reading here.
Price in a 12% vacancy and the same deal goes underwater.
The deal, the catch, and the number that settled it.
Forty doors, six years of one-off financing, one blended number: 1.11x.
1.11x blended on an $18M balance, with two of the four markets doing most of the lifting. It took about a week to assemble, and it is the sheet Aurora now brings to a lender instead of a folder.
Two spreadsheets per file, 120 files a month. They deleted one of them.
A file that took twenty-five minutes to assemble now takes about six. Same team, roughly four times the files — that is arithmetic, not a promise, and it holds only as long as the rent roll going in is clean.
Track 1 said 1.18x. Track 2 said 0.98x. One vacancy assumption was the whole difference.
0.98x. Two hundredths under break-even, same building, same week. Track 1 would have funded it. Track 2 is the reason they walked before the deposit went hard.
Three deals died at the desk — before the appraisal invoice arrived.
All three cleared Track 1 and landed under 1.00x on Track 2. At $3,000–7,000 of diligence a file, that is $14,800 that stayed in the account. Each screen took about three minutes.
More from the desk.
Ten rentals in the buy box, two weeks to choose. I put all ten through in one pass — seven cleared 1.00x, three didn't once vacancy went in. Two of those three were the ones my spreadsheet liked best.
One duplex, $410K, rent at $3,650. It came back 1.28x — and I still wanted the coverage and the rate band on one screen before I spent $3,000 on an appraisal. That call used to take a week.
Rent, rate, taxes, insurance. Four inputs, and the whole verdict sits on them. What I use it for is that every figure shows where it came from, so when an underwriter pushes back I'm not rebuilding the file from memory.
I ran the duplex at 7.25 and it cleared 1.39x, so I stopped reading. Track 2 put the same file at 0.96x once the new insurance quote went in. We restructured before the appraisal, not after.
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