Investment analysis
Demo analysisThis is an example analysis published by the PropertyU Team to show how a completed underwriting looks. The property and numbers are illustrative.
Elmwood Street Duplex (Demo)
Key metrics
- Purchase price
- $385,000
- Net operating income
- $21,200
- Cap rate
- 0.06%
- Cash-on-cash return
- 0.01%
- DSCR
- 1.04
- IRR
- 0.06%
- Equity multiple
- 1.31x
Investment thesis
Clean, fully occupied duplex in a good rental pocket near campus — but the price reflects owner-occupant demand rather than investor math. At $385,000 the going-in cap is 5.5% and the property clears debt by only $1,150 a year. There is no realistic path to fixing that with rents already at market and no obvious value-add.
Biggest risks
A 1.04x DSCR leaves almost no cushion: one turnover month or a single furnace replacement wipes out the year. Break-even occupancy of 92% is uncomfortably high for a two-unit property where one vacancy is 50% of income. The return depends almost entirely on appreciation and principal paydown rather than operations.
Key assumptions
Five-year hold. Rents at market, 3% annual growth, 5% vacancy. 80% LTV at 6.75% fixed, 30-year amortization. Maintenance and capital reserves at $2,400 per unit per year. Exit at a 5.8% cap with 6% total selling costs.
Underwriting details
Supporting operating, financing, and exit figures from the completed underwriting.
- Loan amount
- $308,000
- LTV
- 0.80%
- Monthly cash flow
- $96
- Annual cash flow
- $1,150
- Operating expenses
- $10,720
- Annual debt service
- $20,050
- Break-even occupancy
- 0.92%
- Exit cap rate
- 0.06%
- Initial cash required
- $97,500
About this analysis
This underwriting was built in the PropertyU Deal Lab. Every figure above comes from the author's own assumptions, and the written reasoning is theirs.
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PropertyU provides educational estimates, not personalized investment advice. Published analyses reflect the author's assumptions and opinions.