Multi-Family Cash Flow Calculator

NOI (net operating income) is a standard real-estate metric calculated before financing costs, specifically so it describes the property's operating performance independent of how any particular buyer finances the purchase. Cap Rate is built from NOI, so it inherits the same exclusion. Monthly Mortgage instead reduces Monthly Cash Flow and Cash-on-Cash Return, which describe what's actually left in your pocket after debt service.

Monthly Cash Flow is built from rental income, vacancy, operating expenses, capital reserve, and the mortgage payment you enter directly -- none of which require knowing the purchase price itself once the mortgage payment is already specified. Purchase Price only enters Cap Rate and Cash-on-Cash Return, both of which need a cost basis to express a return as a percentage.

No -- this calculator assumes a 25% down payment (Purchase Price times 0.25) since it doesn't collect an actual down-payment amount as a separate input. If your real down payment is a different percentage, Cash-on-Cash Return here will not match your true return; you'd need to substitute your actual cash invested for the assumed 25% figure to get an accurate number.

Expense Ratio compares operating costs (Monthly Operating Expenses and Monthly Capital Reserve) against income, following the same operating-versus-financing separation used for NOI and Cap Rate. Including debt service would conflate a property's operating efficiency with a specific buyer's financing terms, making it harder to compare properties financed differently.

Cap Rate divides annual NOI (before financing) by Purchase Price, describing the property's unleveraged return as if bought entirely in cash. Cash-on-Cash Return instead divides annual cash flow (after the mortgage payment) by the assumed cash invested (25% down), describing the leveraged return on the actual money put down. The two can differ substantially, especially with significant leverage.