Analyze rental property investment deals by calculating key metrics including cap rate, cash-on-cash return, DSCR, GRM, and the 1% rule. Use when evaluating a property purchase, comparing deals, running what-if scenarios on price or financing, or when an owner asks whether a deal makes financial sense. Produces a deal verdict and 5-year projection.
Evaluate any rental property purchase in under 2 minutes. Returns a clear BUY / PASS / CONDITIONAL verdict with math.
Ask for or look up:
PMT = P * [r(1+r)^n] / [(1+r)^n - 1] Where P = loan amount, r = monthly rate, n = total payments
NOI = Annual effective income - Annual operating expenses (effective income = gross rent x (1 - vacancy rate))
Cap Rate = NOI / Purchase Price Benchmark: 6-10% good, 4-6% acceptable, below 4% weak
Cash-on-Cash Return = Annual cash flow / Total cash invested (cash flow = NOI - debt service) (cash invested = down payment + closing costs + rehab) Benchmark: 8-12%+ target, 5-8% acceptable, below 5% weak
DSCR = NOI / Annual debt service Benchmark: above 1.25 comfortable, 1.0-1.25 tight, below 1.0 negative
GRM = Purchase Price / Annual gross rent Benchmark: below 12 good, 12-15 fair, above 15 expensive
1% Rule = Monthly rent / Purchase price Benchmark: above 1% likely cash flows, below 0.7% likely negative
Price per square foot = Purchase price / Square footage
Rent-to-mortgage ratio = Monthly rent / Monthly mortgage Benchmark: above 1.3 strong buffer, 1.0-1.3 tight
STRONG BUY: cash-on-cash >= 8% AND cap rate >= 5% AND DSCR >= 1.25 ACCEPTABLE: cash-on-cash >= 5% AND cap rate >= 4% WEAK: does not meet acceptable thresholds
DEAL ANALYSIS — [ADDRESS]
Date: [TODAY]
PURCHASE
Price: $[X]
Closing costs: $[X] ([X]%)
Rehab budget: $[X]
Total investment: $[X]
FINANCING
Down payment: $[X] ([X]%)
Loan amount: $[X]
Rate: [X]% / [X] years
Monthly payment: $[X]
Total cash needed: $[X]
INCOME (monthly)
Gross rent: $[X]
Vacancy ([X]%): -$[X]
Effective income: $[X]
EXPENSES (monthly)
Taxes: $[X]
Insurance: $[X]
Maintenance: $[X]
CapEx reserve: $[X]
Management: $[X]
Other: $[X]
Total expenses: $[X]
CASH FLOW
Monthly NOI: $[X]
Monthly mortgage: $[X]
Monthly cash flow: $[X]
Annual cash flow: $[X]
KEY METRICS
Cap Rate: [X]% [benchmark]
Cash-on-Cash: [X]% [benchmark]
DSCR: [X] [benchmark]
GRM: [X] [benchmark]
1% Rule: [X]% [benchmark]
Price/sqft: $[X]
Rent/mortgage: [X]
VERDICT: [STRONG BUY / ACCEPTABLE / WEAK]
[One sentence explanation]
WHAT-IF SCENARIOS
At $[price - 10%]: Cap rate [X]%, CoC [X]%
At $[price + 10%]: Cap rate [X]%, CoC [X]%
At [rate + 1%]: Cash flow $[X], CoC [X]%
At [rent + $200]: Cash flow $[X], CoC [X]%
Save to: ~/.openclaw/workspace/properties/deal-[address-slug]-[date].md
Assumptions:
Project for each year:
This skill is part of the Homestruk Landlord Operations System — a complete property management toolkit for self-managing landlords.
Free: Download the Rent-Ready Turnover Checklist at homestruk.com Full System: 10 operations documents + spreadsheets at homestruk.com
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