Returns & IRR · levered + unlevered

What will this investment actually earn?

Levered IRR

5.6%

Verdict

WEAK

Cash-on-cash return (yearly cash flow as a % of the cash you put in), IRR (the annualized return on your equity, accounting for the full exit), and equity multiple — from day one through the sale.

Tip: adjust inputs on the left. The IRR updates live. Then check the sensitivity table to see if the deal still works under slower rent growth or an earlier exit.

Your money over the hold

cumulative cash

You put $106,250 down, collect cash flow each year, then the sale in year 5 returns the rest. The line crossing break-even is when your capital is back — the final point is total profit.

-6.9%

Cash-on-cash

1.35x

Equity multiple

Yr 5

Capital back

Live returns engine

Levered IRR 5.6% · 1.35x equity multiple

IRR below 8% — the deal may not reward the risk. Try a lower price, higher rent, or a shorter prepay structure.

Deal inputs

Drag any slider — the IRR and sensitivity table update instantly.

Purchase Price$425,000

Total acquisition cost.

LTV (Loan-to-Value)75%

Your down payment = 100% − LTV. Example: 75% LTV means 25% down.

Note Rate7.000%

Your fixed mortgage rate.

Monthly Rent$3,000

Gross scheduled rent before vacancy.

Hold & exit

Hold Years5yr

Your planned hold — the IRR is highly sensitive to this.

Exit Cap Rate5.17%

The expected cap rate when you sell — higher cap rate = lower exit value. Conservative: assume 0.5–1% above your entry cap.

Rent Growth /yr4.0%

Annual rent increase assumption. 2–3% is typical; stress-test with 1%.

Vacancy %5%

Fraction of the year the unit is vacant. 5–10% is typical.

Levered IRR

5.6%

WEAK

-6.9%

Cash-on-Cash Return

Year 1 cash flow ÷ cash invested. Good: ≥8%

6.8%

Unlevered IRR

IRR if you paid all cash — no loan

1.35x

Equity Multiple

Total cash returned ÷ cash invested

$106,250

Cash Invested

Down payment only

4.68%

Cap Rate (entry)

Net operating income ÷ purchase price

6.23%

Debt Yield

Net income ÷ loan amount (lender metric)

1.05x

DSCR at entry

DSCR (debt-service coverage ratio) measures whether the property's net income covers the full loan payment. 1.05x means the income is 5% above the break-even point. Above the 1.00x floor most residential DSCR programs set, though with little room once operating costs are counted.

Sensitivity table — Levered IRR

How your IRR changes under different hold periods (rows) and rent-growth rates (columns). Teal cells (≥14%) are strong; amber is acceptable; red needs work. Your current inputs are the base case.

Hold	+1% rent growth	+2% rent growth	+3% rent growth	+4% rent growth
3yr	-24.2%	-16.5%	-9.9%	-3.9%
5yr← you	-12.2%	-5.1%	0.7%	5.6%
7yr	1000.0%	1000.0%	1000.0%	1000.0%
10yr	-2.5%	2.9%	7.0%	10.4%
12yr	-0.9%	4.0%	7.7%	10.8%

≥14% — strong

10–14% — acceptable

6–10% — marginal

<6% — weak

Loss Scenarios — Downside Stress Tests

What happens if rent drops, insurance spikes, or you face a vacancy? Each scenario shows the new DSCR and your monthly out-of-pocket cost if cash flow goes negative.

Rent −5%

DSCR 0.99x

Cash flow: -$15/mo — you'd cover $175/yr from savings

Rent −10%

DSCR 0.94x

Cash flow: -$165/mo — you'd cover $1,975/yr from savings

Insurance +30%

DSCR 1.03x

Cash flow: $85/mo — thin margin, minimal buffer

Tax reassess +25%

DSCR 1.00x

Cash flow: -$9/mo — you'd cover $107/yr from savings

1 vacant month

DSCR 0.96x

Cash flow: -$115/mo — you'd cover $1,375/yr from savings

Positive cash flow

Thin margin

Out-of-pocket subsidy

Preliminary estimate — not a commitment to lend. IRR and equity multiple are model outputs; actual returns depend on market conditions, financing terms, vacancies and costs not captured here. Submit a scenario review for exact underwriting.

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