Market and Underwriting
Back to Home. Main analysis: Investment Analysis. Calculator: Decision Calculator. Cost model: Cost Model. Rent comps: Rent Comps.
Acquisition metrics
Current decision range: $2.0M to $3.495M. The upper bound is the current listed-price frame used in the calculator.
Assumptions:
- Existing units: 8.
- Existing building size: approx. 5,788 SF.
- Lot: approx. 7,872 SF.
Purchase price
Price / existing unit
Price / existing building SF
Price / land SF
$2,000,000
$250,000
~$346
~$254
$2,500,000
$312,500
~$432
~$318
$3,000,000
$375,000
~$518
~$381
$3,495,000
$436,875
~$604
~$444
Tax sensitivity
Purchase price
1.10%
1.20%
1.25%
1.30%
Monthly at 1.25%
$2,000,000
$22,000
$24,000
$25,000
$26,000
$2,083
$2,500,000
$27,500
$30,000
$31,250
$32,500
$2,604
$3,000,000
$33,000
$36,000
$37,500
$39,000
$3,125
$3,495,000
$38,445
$41,940
$43,688
$45,435
$3,641
Exact assessment treatment must be verified.
Rent scenarios
Using 6 x 1BR and 2 x 2BR:
Scenario
1BR rent
2BR rent
Gross monthly
Gross annual
Use
Base fallback
$3,500
$4,750
$30,500
$366,000
Downside check
Renovated furnished base
$4,250
$5,750
$37,000
$444,000
Primary early case
Furnished upside
$4,750
$6,500
$41,500
$498,000
Upside case if comps prove it
Aggressive premium
$5,500
$7,500
$48,000
$576,000
Ceiling; not base case
Underwriting takeaway
The deal is mainly sensitive to:
- Purchase price. Moving from $3.495M toward $2.75M or lower creates real room for renovation and risk.
- Total budget. Owner-sourced work may create value, but systems, legal, insurance, and contingency cannot be wished away.
- Achieved rent. Premium rents need direct proof. The model should not rely on luxury comps that are larger, newer, or materially better.
- Operating expense drag. Taxes, insurance, utilities, vacancy, repairs, furniture replacement, and management can absorb much of the gross-rent premium.
- Debt terms. If financing is involved, DSCR may be the gating constraint. Use Decision Calculator with debt enabled.