Multi-Family Property Calculator
Analyze duplex, triplex, and quadplex investments. Calculate NOI, cap rate, DSCR, and cash-on-cash return. Model value-add scenarios, compare financing options, and project 5-year returns with exit strategy analysis.
| Unit | Monthly Rent | Annual Rent | Annual Expenses | Annual Debt | Unit Cash Flow |
|---|---|---|---|---|---|
| Unit 1 | $1,600 | $19,200 | $6,000 | $11,256 | $984 |
| Unit 2 | $1,600 | $19,200 | $6,000 | $11,256 | $984 |
| Unit 3 | $1,600 | $19,200 | $6,000 | $11,256 | $984 |
| Total | $4,800 | $57,600 | $18,000 | $33,768 | $2,952 |
| Year | Gross Revenue | EGI | Expenses | NOI | Est. Value | Equity |
|---|---|---|---|---|---|---|
| 1 | $59,328 | $56,362 | $18,450 | $37,912 | $583,255 | $174,748 |
| 2 | $61,108 | $58,052 | $18,911 | $39,141 | $602,172 | $197,956 |
| 3 | $62,941 | $59,794 | $19,384 | $40,410 | $621,692 | $222,090 |
| 4 | $64,829 | $61,588 | $19,869 | $41,719 | $641,834 | $247,191 |
| 5 | $66,774 | $63,435 | $20,365 | $43,070 | $662,617 | $273,305 |
How to Analyze a Multi-Family Investment Property
Multi-family properties (2-4 units) are one of the most accessible ways to start real estate investing. Unlike house-hacking (where you live in one unit), this calculator focuses on pure investment properties where all units are rented.
- Purchase Price: Total acquisition cost.
- Down Payment: Investment properties typically require 20-25% down. Conventional loans for 2-4 units require 25% for non-owner-occupied.
- Total Monthly Rent: Combined rent for all units at 100% occupancy. Verify with local property managers.
- Vacancy Rate: The percentage of time units sit empty. 5% is standard in tight markets; use 8-10% in softer markets or during tenant turnover.
- Annual Operating Expenses: Property taxes, insurance, property management (8-10% of rent), maintenance reserves, and repairs. Do not include mortgage payments.
Key Multi-Family Investment Metrics
Cap Rate (Capitalization Rate)
NOI = Effective Gross Income − Operating Expenses
EGI = Gross Rent × (1 − Vacancy Rate)
Cap rate is the unlevered return — what you'd earn if you paid all cash. Target 5-8% in most markets. Cap rates below 4% are typical in high-demand coastal cities; above 8% signals higher risk or lower-demand markets.
Debt Service Coverage Ratio (DSCR)
DSCR 1.0 = Break even (NOI exactly covers debt)
DSCR 1.25 = Most lenders' minimum requirement
DSCR 1.5+ = Healthy cushion
DSCR is the #1 metric lenders use for investment property qualification. A DSCR below 1.0 means the property doesn't generate enough income to cover its mortgage — a red flag for both lenders and investors.
Cash-on-Cash Return
Annual Cash Flow = NOI − Annual Debt Service
CoC measures the actual cash return on your out-of-pocket investment (down payment + closing costs). Target 8-12%+ for competitive returns. Many investors accept lower CoC in appreciating markets where they expect equity growth to compensate.
Example: A Triplex Investment
The Oak Street Triplex
| Purchase Price | $550,000 |
| Down Payment (25%) | $137,500 |
| Loan Amount | $412,500 |
| Interest Rate / Term | 7.25% / 30 years |
| Monthly P&I | $2,814 |
| Total Monthly Rent (3 units) | $4,800 ($1,600/unit) |
| Vacancy (5%) | -$2,880/yr |
| Effective Gross Income | $54,720/yr |
| Operating Expenses | $18,000/yr |
| Net Operating Income (NOI) | $36,720/yr |
| Annual Debt Service | $33,768/yr |
| Annual Cash Flow | $2,952/yr (+$246/mo) |
| Cap Rate | 6.68% |
| Cash-on-Cash Return | 2.1% |
| DSCR | 1.09 |
This deal has thin but positive cash flow. The CoC is low (2.1%) but the 6.68% cap rate is solid. The DSCR of 1.09 is below the 1.25 conventional minimum — this deal may need a DSCR loan or larger down payment. A value-add strategy to raise rents to $1,800/unit would dramatically improve all metrics.