Investment signal

Reviewing the opportunity

Adjust the assumptions to evaluate pricing, financing capacity and investor return.

Cash-on-cash—

DSCR—

Levered IRR—

Deal assumptions

Underwrite the acquisition

Property

Purchase price $ Appraised value $ Year 1 NOI $ Building area SF Closing costs % Initial capital work $ Year 1 appreciation %

Financing

Loan-to-value % Lender maximum LTV % Interest rate % Amortization years Mortgage term years Lender fee % Required DSCR × Minimum debt yield % Target cash-on-cash %

Hold and disposition

Holding period years Annual NOI growth % Exit cap rate % Selling costs %

Acquisition lens

Investor returns

Calculating

Initial cash required—Down payment + closing + capex + lender fee

Going-in cap rate—

Cash-on-cash return—

Levered IRR—

Unlevered IRR—Property return before financing

Equity multiple—

Year 1 total ROE—Cash flow + principal + appreciation

Purchase price / SF—

NOI / SF—

Credit lens

Lender underwriting

Calculating

Loan amount——

Monthly payment—

Annual debt service—

DSCR—

Debt yield—

DSCR cushion—

Break-even NOI—

Year 1 principal paydown—

Balance at mortgage maturity——

Financing capacity

What the property can support

DSCR, debt yield and maximum LTV are tested together. Final proceeds remain subject to underwriting.

DSCR-supported loan—Based on NOI, rate, amortization and required DSCR

LTV-capped loan—Lending value × lender maximum LTV

Debt-yield-supported loan—NOI ÷ minimum debt yield

Maximum financeable loan—Lowest result from all three lender tests

Maximum financeable LTV—

Financing cushion——

NOI required at selected DSCR—

Annual debt constant—Annual debt service ÷ loan amount

Year 1 cash flow after debt—

Lending value—Lower of purchase price and appraised value

Before relying on the result

Validate the inputs that move the deal

NOI quality: reconcile the rent roll, leases, recoveries, vacancy and normalized operating expenses.
Value: lender LTV is commonly constrained by the lower of purchase price and appraised value.
Debt: confirm term, amortization, rate type, fees, reserves, recourse and lender-specific credit rules.
Exit: stress-test the exit cap, disposition costs, leasing costs and capital work—not just NOI growth.

Pricing guidance

What the assumptions support

Max price at target CoC——

Estimated exit value—Forward NOI ÷ exit cap rate

Net sale proceeds—After selling costs and debt repayment

Sale price change——

Risk range

Three-case stress test

Conservative and upside cases adjust NOI growth, interest rate and exit cap rate.

Scenario convention

Conservative: NOI growth −1.0%, interest +0.75%, exit cap +0.50%. Upside: NOI growth +1.0%, interest −0.50%, exit cap −0.35%. Review the assumptions before relying on the range.

Hold-period model

Annual levered cash flow

—

Year	NOI	Debt service	Cash flow	Ending loan	Sale proceeds

Calculation methodology

Debt payments use a Canadian nominal rate compounded semi-annually. Acquisition LTV uses the lower of purchase price and appraised value. Exit value uses the next 12 months’ forward NOI. Total operating cash flow excludes sale proceeds; equity multiple and IRR include them. If the hold exceeds the mortgage term, refinancing costs and new loan terms are not modelled.

Professional review

Numbers identify the issue. Strategy closes the deal.

Request a review of the acquisition price, financing structure and lender positioning.

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