Cap Rate vs Cash-on-Cash Return: Which Number Should Drive the Offer?
Cap rate measures the property; cash-on-cash measures your money. Same $325K rental: 5.96% cap rate, 0.9% cash-on-cash. Why, and which number to offer on.
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How to underwrite a rental, read cap rate and cash-on-cash, calculate DSCR, estimate ARV, and find the Deal Gap before you offer.
Start with the pillar guide: DealGapIQ Methodology
Cap rate measures the property; cash-on-cash measures your money. Same $325K rental: 5.96% cap rate, 0.9% cash-on-cash. Why, and which number to offer on.
Read →Step-by-step rental property analysis: rent, expenses, NOI, debt service, cash flow, and the price that makes it work. $325K example, every number shown.
Read →DSCR = net operating income ÷ debt service. The formula, a $325K example that lands at 1.04, why lenders want 1.20+, and four ways to raise it.
Read →Cash flow is a price, not a property. How to screen listings, verify rent, and solve for the price that makes a rental cash flow positive. $325K example.
Read →The Deal Gap is the distance between asking price and the Target Buy that makes a rental pencil. How it is calculated, with a $325K worked example.
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