The 5-Number Framework That Tells You If a Rental Deal Works

Most people spend months "researching" rental properties without ever learning how to evaluate a deal. Here's the framework I teach — in 5 minutes, you'll know if a property is worth pursuing.

The 5 Numbers You Need

1. Net Operating Income (NOI) — Revenue − Operating Expenses = NOI

2. Cap Rate — NOI ÷ Purchase Price — Below 5%? Overpriced. Above 8%? Worth a look.

3. Cash-on-Cash Return — Annual Cash Flow ÷ Total Cash Invested — Target 7%+.

4. DSCR — NOI ÷ Annual Mortgage Payment — Banks want 1.25+.

5. Break-Even Ratio — (Expenses + Mortgage) ÷ Gross Rent — Under 85% = solid.

The Quick Test

Pull up any rental listing:

• Monthly rent × 12 = Gross Income

• Multiply by 0.50 = NOI estimate

• Subtract annual mortgage = Cash Flow

• Divide by down payment = CoC Return

CoC > 7% → analyze deeper. CoC < 4% → move on.

Inside the full course: 401k/SDIRA strategies, cash flow waterfalls, stress testing, deal scorecards, and a 90-day action plan.

Ready to master rental property analysis? Join CashFlow Academy today.

The 5-Number Framework That Tells You If a Rental Deal Works

Most people spend months "researching" rental properties without ever learning how to actually evaluate a deal. Here's the exact framework I teach my students — in under 5 minutes, you'll know if a property is worth pursuing.

The 5 Numbers You Need

1. Net Operating Income (NOI)

Revenue − Operating Expenses = NOI

This tells you what the property earns before mortgage. It's the foundation of every other calculation.

2. Cap Rate

NOI ÷ Purchase Price = Cap Rate

Compare to local market caps. Below 5%? Probably overpriced. Above 8%? Worth a deeper look.

3. Cash-on-Cash Return

Annual Cash Flow ÷ Total Cash Invested

This is YOUR return on the actual dollars you put in. Target: 7%+ for retirement investing.

4. Debt Service Coverage Ratio (DSCR)

NOI ÷ Annual Mortgage Payment

Banks want 1.25+. Below 1.0 means the property can't pay its own mortgage.

5. Break-Even Ratio

(Expenses + Mortgage) ÷ Gross Rent

Under 85% = solid. Over 95% = dangerous.

The Quick Test

Pull up any rental listing right now:

• Monthly rent × 12 = Gross Income

• Multiply by 0.50 (rough expenses) = NOI estimate

• Subtract annual mortgage payment = Cash Flow

• Divide cash flow by your down payment = CoC Return

If CoC > 7% → worth analyzing deeper.

If CoC < 4% → move on.

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This is just the surface. Inside the full course, I cover:

• ✅ Using 401k/SDIRA funds for real estate

• ✅ Complete cash flow waterfall analysis

• ✅ Stress testing against vacancy, rate hikes, and expense shocks

• ✅ Multi-property comparison scorecards

• ✅ A 90-day action plan from student to investor

Ready to master rental property analysis? Join CashFlow Academy and start building your retirement portfolio today.

The 5-Number Framework That Tells You If a Rental Deal Works

Most people spend months "researching" rental properties without ever learning how to actually evaluate a deal. Here's the exact framework I teach my students — in under 5 minutes, you'll know if a property is worth pursuing.

The 5 Numbers You Need

1. Net Operating Income (NOI)

Revenue − Operating Expenses = NOI

This tells you what the property earns before mortgage. It's the foundation of every other calculation.

2. Cap Rate

NOI ÷ Purchase Price = Cap Rate

Tells you the property's return regardless of financing. Compare to local market caps. Below 5%? Probably overpriced. Above 8%? Worth a deeper look.

3. Cash-on-Cash Return

Annual Cash Flow ÷ Total Cash Invested

This is YOUR return on the actual dollars you put in. Target: 7%+ for retirement investing.

4. Debt Service Coverage Ratio (DSCR)

NOI ÷ Annual Mortgage Payment

Banks want 1.25+. If it's below 1.0, the property literally can't pay its own mortgage.

5. Break-Even Ratio

(Expenses + Mortgage) ÷ Gross Rent

Shows your margin of safety. Under 85% = solid. Over 95% = dangerous.

The Quick Test

Pull up any rental listing right now:

• Monthly rent × 12 = Gross Income

• Multiply by 0.50 (rough expenses) = NOI estimate

• Subtract annual mortgage payment = Cash Flow

• Divide cash flow by your down payment = CoC Return

If CoC > 7% → worth analyzing deeper.

If CoC < 4% → move on.

---

This is just the surface. Inside the full course, I cover:

• ✅ Using 401k/SDIRA funds for real estate

• ✅ Complete cash flow waterfall analysis

• ✅ Stress testing against vacancy, rate hikes, and expense shocks

• ✅ Multi-property comparison scorecards

• ✅ A 90-day action plan from student to investor

Ready to master rental property analysis? Join CashFlow Academy and start building your retirement portfolio today.