Multifamily Calculator — Free Cap Rate, DSCR & NOI

Small multifamily is a rent roll minus vacancy, ops, and debt. Cap rate without DSCR is a brochure. DSCR without break-even occupancy is a hope.

Units times rent times twelve is gross rental income — the ceiling, not the paycheck. Vacancy turns that into effective gross income. Operating expenses here are taxes, insurance, and percentages of EGI for maintenance, capex, and management. NOI is what is left before debt. That NOI is the raw material for cap rate, cash-on-cash, and DSCR. If you skip capex because 'I'll do the work myself,' you are reporting a lifestyle, not an asset.

Cap rate is NOI / price. It ignores the loan on purpose so you can compare buildings. Cash-on-cash uses the cash you actually wired (price minus loan) and the cash after debt. DSCR is NOI / annual debt service. The gauge is green at 1.25 and above, yellow from 1.0 to 1.24, red below 1.0. Agencies and many banks live in the green. Yellow is a conversation. Red is a future short sale you are volunteering for.

GRM is price / GRI — crude and still useful when you are screening five listings in an hour. Price per unit tells you if you are buying a real apartment or a house wearing a fourplex costume. Break-even occupancy is the occupancy you need for ops plus debt to equal gross potential. If break-even is 94% in a student market, you do not have a cushion. You have a part-time job as a leasing agent.

Type the rents you can defend with three leased comps, not the pro forma from the broker's PDF. Type vacancy your property manager actually sees, not 3% because the building is 'full today.' Full today is not a vacancy rate. It is a snapshot.

If DSCR is red and cap rate looks fine, the loan is the problem — rate, term, or leverage. If both are ugly, the price is the problem. This calculator will not talk the seller down. It will tell you the number to take them.

Cross-check with commercial if the asset is mixed-use, and with BRRRR if you are forcing appreciation through a value-add rehab before a refi.

The identities

NOI = EGI − OpEx
DSCR = NOI / Annual debt service
Cap = NOI / Price

EGI = GRI × (1 − vacancy%). Break-even occupancy uses ops plus debt over GRI.

How people blow the result

• Using market rents on a building full of $200-under leases with a year left.
• Zeroing management because you live next door.
• Celebrating cap rate on an interest-only teaser you cannot refinance.

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