The Numbers That Matter: How to Analyze a Deal

Eighty percent of new investors admit they buy properties based on gut feelings, not hard numbers. You’re standing in a crowded open house: fresh paint, staged furniture, friendly agent. It feels right. But here’s the twist—one hidden number can quietly turn this “deal” into a drain.

That’s where the core deal metrics come in. Before you worry about paint colors or “upside,” you need to know what the numbers are actually saying. In this episode, we’ll break down the six metrics that experienced investors lean on: Net Operating Income (NOI), Cap Rate, Cash-on-Cash Return, Debt-Service Coverage Ratio (DSCR), Internal Rate of Return (IRR), and plain-vanilla ROI.

These aren’t theory. In Q1 2024, U.S. multifamily traded at an average cap rate of 5.3%. Most commercial lenders won’t even quote you a loan unless your DSCR is at least 1.20–1.35. And a simple 1% jump in interest rates can slash the Cash-on-Cash Return on a 75%-leveraged deal by 2–3 percentage points.