Deal Analyzer
Last updated June 2026
How to Use This Calculator
Enter the purchase price, expected monthly rent, and basic expenses. The analyzer instantly grades the deal from A to F by checking it against five industry-standard rules of thumb. It also tells you what price would make the deal work if the current numbers fail.
Input Fields Explained
- Purchase Price: The total acquisition cost including closing costs. Find asking prices on Zillow, Redfin, or your local MLS. For off-market deals, use recent comps within a half-mile radius sold in the last 90 days.
- Monthly Rent: Expected gross rent for all units combined. Check Rentometer, Zillow Rent Zestimates, or Apartments.com for comparable rents in the neighborhood. Call local property managers for the most accurate rental comps.
- Down Payment: The cash you plan to invest upfront. Conventional loans require 20-25% for investment properties. DSCR loans vary by lender. FHA house-hacking allows as low as 3.5% on owner-occupied 2-4 unit properties.
- Interest Rate: Your expected mortgage rate. Get pre-qualified with a lender for an accurate quote. Investment property rates typically run 0.5-0.75% higher than primary residence rates.
- Operating Expenses: Monthly costs including property tax, insurance, maintenance, property management (8-10% of rent), and reserves. If you do not know exact numbers, the 50% rule (half of gross rent) is a reasonable starting estimate.
Reading the Letter Grade
The letter grade is a composite score across all five rules of thumb. An A or B grade means the deal passes most or all screening tests and is worth deeper due diligence — ordering inspections, verifying rent rolls, and reviewing title. A C grade is a caution flag: one or two metrics are marginal, so you need to understand exactly which ones are failing and whether you can fix them through negotiation or value-add improvements. A D or F grade means the deal does not work at the listed price and you should either submit a lower offer or move on entirely.
Quick Analysis
Deal Analyzer
Get a quick deal-or-no-deal verdict. 5 inputs, instant answer.
Property Details
Rules of Thumb
1% Rule
Rent is < 1% of all-in cost
0.90%
FAIL
Cap Rate
Above 5% minimum
8.46%
PASS
Cash-on-Cash
Above 8% target
10.37%
PASS
DSCR
Above 1.2x threshold
1.32x
PASS
50% Rule
Est. expenses ~50% of rent = $855
$855
PASS
What Price Would Work?
For 1% Rule
$180,000
For 5% Cap Rate
$338,400
Deal Grade
B
Good deal. Passes most criteria.
4/5 rules passed
Cash Flow
$346/mo
$4,146/year
Key Metrics
Real Estate Rules of Thumb
1% Rule
Rent >= 1% of Price
Quick screening for rental properties. $200K property should rent for $2K+/month. Properties that fail this test rarely cash flow with financing.
50% Rule
Expenses = 50% of Rent
Estimate that half your gross rent goes to operating expenses (not including mortgage). Useful for quick napkin math before running a full analysis.
Cap Rate
Target 5-10%
Net Operating Income divided by property value. Ignores financing. Good for comparing properties on an equal basis regardless of how you fund the deal.
DSCR
Target 1.2x+
Gross rent divided by total debt payments (PITIA). Measures whether income covers the mortgage. Lenders use this to qualify DSCR loans.
How the Deal Grade Works
The analyzer checks your deal against all five rules simultaneously and assigns a letter grade based on how many rules it passes. This is not a guarantee of success. It is a quick filter to identify which deals are worth deeper analysis and which you should pass on.
- Grade A (5/5 rules pass): Strong deal by all measures. Worth moving forward with detailed due diligence.
- Grade B (4/5): Good deal with one metric slightly below threshold. Investigate the failing metric to see if it is a deal-breaker.
- Grade C (3/5): Marginal. The deal might work but has meaningful weaknesses. Proceed only if you understand and accept the risks.
- Grade D-F (2 or fewer): The numbers do not work at this price. Use the "What Price Would Work" section to see if a lower offer could fix it.
Speed matters
What Price Would Work?
When a deal fails at the listed price, the analyzer shows you two target prices: one based on the 1% rule and one based on a 5% cap rate. These tell you the maximum you should offer to make the numbers work. Use these as starting points for negotiation, not final offers.
When to Walk Away
Discipline separates successful investors from everyone else. Most experienced investors analyze 100 deals to find one worth buying. Walking away from a bad deal is not failure — it is the strategy working as intended.
What D and F Grade Deals Look Like
A D or F grade means the property fails on multiple fundamentals. The rent-to-price ratio is too low, the cap rate does not justify the risk, and the debt service coverage is thin or negative. These deals only work if you assume aggressive rent increases, zero vacancy, or below-market expenses — assumptions that get investors into trouble. If the deal needs everything to go right just to break even, it is not a deal.
Common Red Flags
- High capital expenditure needs: A roof, HVAC, or foundation issue can add $10,000-$30,000 to your all-in cost. If the inspection reveals major deferred maintenance, re-run the numbers with the true total investment — most D-grade deals become F-grade deals after accounting for capex.
- Structural and environmental issues: Foundation cracks, termite damage, mold remediation, and lead paint abatement are expensive and unpredictable. These are not negotiating chips — they are reasons to walk away unless you are an experienced rehabber.
- Flood zones and insurance costs: Properties in FEMA flood zones carry mandatory flood insurance that can add $2,000-$5,000/year to operating expenses. Check FEMA flood maps before making any offer. Many investors skip this step and discover the cost after closing.
- Declining neighborhoods: Falling rents, rising vacancy, and population loss are trends you cannot fix with better management. Check Census data and local employment trends before investing in any market.
- Seller refuses inspection: A seller who will not allow a full inspection is hiding something. No inspection means no deal, regardless of how good the numbers look on paper.
The 100-deal rule
Frequently Asked Questions
What is the 1% rule in real estate investing?
What is a good cap rate for a rental property?
What cash-on-cash return should I target?
What does DSCR mean and why does it matter?
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