Commercial investment model

Cap rate, leverage & return.

Purchase price ($)

Year-1 NOI ($)

Loan-to-value (%)

Interest rate (%)

Amortization (years)

Closing costs (%)

Hold period (years)

Annual NOI growth (%)

Exit cap rate (%)

Going-in cap rate

7.00%

Cash-on-cash (yr 1)

4.35%

DSCR

1.30×

Levered IRR

10.85%

Equity required

$2.40M

Loan amount

$4.22M

Annual debt service

$350K

Equity multiple

1.61×

Year	NOI	Debt service	Cash flow
1	$455K	$350K	$105K
2	$469K	$350K	$118K
3	$483K	$350K	$132K
4	$497K	$350K	$147K
5	$512K	$350K	$162K

Exit value $7.28M at 7.25% cap · loan payoff $3.84M · net sale proceeds $3.22M after 3% selling costs.

For illustration only. Excludes taxes, reserves, and capital expenditures; not investment advice.