Deal Analysis for Real Estate Investors
19 articles
Deal analysis is the single most important skill in real estate investing. A great deal in the wrong market still beats a bad deal in a hot market — but only if you can tell the difference. These guides cover every metric and method you need to evaluate rental properties, flips, and BRRRR deals. From cap rate and cash-on-cash return to NOI and the 1% rule, learn how to run the numbers like an experienced investor.
All Articles
Understanding Cap Rate Compression: What It Means for Your Portfolio
Cap rate compression quietly erodes returns while prices climb. Learn what drives it, how to spot it early, and how to protect your portfolio.
Mar 21, 2026
How to Use the BRRRR Calculator to Vet Deals Faster
Learn how to use a BRRRR calculator to vet rental deals faster, avoid costly mistakes, and maximize your returns with real numbers.
Mar 21, 2026
The 70% Rule for Flipping Houses: How to Calculate Your Maximum Offer
The 70% rule is the most used formula in house flipping. Here's how to calculate your maximum allowable offer and when to adjust the formula.
Mar 21, 2026
Rental Property Investing: The Complete Guide to Building Passive Income
Everything you need to know about buying, financing, and managing rental properties for long-term wealth building and passive income.
Mar 19, 2026
Cash-on-Cash Return vs. Cap Rate: Which Metric Should You Use?
Cap rate and cash-on-cash return measure different things. Here's when to use each metric and why smart investors track both.
Mar 18, 2026
How to Analyze a Rental Property in Under 5 Minutes
A fast, repeatable framework for evaluating rental properties using cap rate, cash-on-cash return, and the 1% rule.
Mar 15, 2026
Cap Rate Explained: The Most Important Number in Real Estate Investing
Cap rate is the first metric every investor learns — and the one most frequently misunderstood. Here's how to actually use it to compare deals and make better decisions.
Mar 12, 2026
Frequently Asked Questions
What is a good cap rate for rental properties?
Generally, 6-10% is considered a good cap rate for rental properties. Above 8% is strong for cash flow, while 4-6% is typical in appreciation-focused markets. The "right" cap rate depends on your strategy and risk tolerance.
What is the 1% rule in real estate?
The 1% rule states that monthly rent should equal at least 1% of the purchase price. A $200,000 property should rent for at least $2,000/month. It is a quick screening tool, not a definitive analysis — always run full numbers.
How do I calculate cash-on-cash return?
Cash-on-cash return = Annual Pre-Tax Cash Flow / Total Cash Invested. If you invest $50,000 (down payment + closing costs) and earn $5,000/year in cash flow after all expenses and debt service, your cash-on-cash return is 10%.
What is NOI and why does it matter?
Net Operating Income (NOI) = Gross Rental Income - Operating Expenses (excluding debt service). It measures a property's profitability before financing, making it useful for comparing properties regardless of how they are financed.
Stay Ahead of the Market
Weekly insights on deal analysis, market trends, and investing strategies. Free, no spam.
Related Calculators
Key Terms to Know
1% Rule
A quick screening guideline stating that a rental property's monthly rent should equal at least 1% of its purchase price. A $200,000 property should generate at least $2,000 per month in rent. The rule provides a fast initial filter but should never replace thorough cash flow analysis.
50% Rule
A rule of thumb estimating that operating expenses on a rental property will consume approximately 50% of gross rental income, excluding mortgage payments. This allows investors to quickly estimate net operating income by halving gross rent, providing a fast initial assessment of cash flow potential.
Absorption Rate
The rate at which available properties in a market are sold or leased over a given time period. A high absorption rate indicates strong demand and typically favors sellers/landlords, while a low rate favors buyers/tenants.
After Repair Value (ARV)
The estimated market value of a property after all planned renovations and repairs are completed. ARV is critical for fix-and-flip investors and BRRRR strategy practitioners to determine maximum purchase price.
Break-Even Ratio
The occupancy level at which a property's income exactly covers all expenses including debt service. Calculated as (Operating Expenses + Debt Service) / Gross Operating Income. A lower break-even ratio indicates less risk.
Cap Rate
The capitalization rate is the ratio of a property's net operating income (NOI) to its purchase price or current market value, expressed as a percentage. It measures the expected rate of return on an investment property.
Other Topics
Get Smarter Deal Analysis
Weekly insights on cap rates, cash flow, and strategies used by experienced investors. Free, no spam.