Annual property operating data

Use stabilized, supportable figures—not only the seller's pro forma. Income fields below are monthly; expenses are annual.

Income

Scheduled base rent / month $ Other income / month Parking, reimbursements, laundry, signage, storage $ Vacancy & credit loss %

Annual operating expenses

NOI excludes debt service, depreciation, income taxes, and capital expenditures.

Property taxes $ Property insurance $ Owner-paid utilities $ Repairs & maintenance $ Management fee Calculated from effective gross income % Administrative & professional $ Other operating expenses $ Capital reserve / year Shown below NOI for roofs, paving, HVAC, tenant improvements $

Purchase & financing

Purchase price $ Down payment % Interest rate % Amortization period years Loan term / maturity The remaining balance is normally due or refinanced at maturity years Closing & loan costs $ Initial repairs / improvements $ Target acquisition cap rate %

Hold & resale assumptions

Holding period years Annual NOI growth % Exit cap rate A higher exit cap rate lowers the projected sale price % Selling costs %

Investment snapshot

Enter values to evaluate the property.

How the APOD and return calculations work

Effective gross income is scheduled rent plus other income, less vacancy and credit loss. NOI is effective gross income minus ordinary operating expenses. It excludes financing, depreciation, income taxes, and capital expenditures. Cap rate is NOI ÷ purchase price. Cash-on-cash return is first-year pre-tax cash flow ÷ initial cash invested. DSCR is NOI ÷ annual debt service. Debt yield is NOI ÷ loan amount.

The hold projection grows NOI annually, keeps scheduled debt service constant, values the sale using the next year's NOI and the exit cap rate, deducts selling costs and the remaining loan balance, and estimates annual IRR and equity multiple. It does not model taxes, depreciation, refinancing, lease rollover costs, or irregular capital projects.

Method references: the OCC's Commercial Real Estate Lending handbook for DSCR and debt yield, and the federal banking agencies' real-estate appraisal guidance for direct capitalization and terminal cap rates.

Commercial property due-diligence checklist

Reconcile the rent roll, every lease, concessions, arrears, expirations, options, reimbursements, and security deposits.
Compare trailing 12-month statements and tax returns with the seller's pro forma; normalize one-time and deferred expenses.
Test market rent, vacancy, absorption, tenant credit, rollover concentration, and the cost and downtime to replace tenants.
Price immediate and long-term capital work: roof, structure, paving, elevators, HVAC, fire/life-safety, ADA access, and tenant improvements.
Verify zoning, permitted use, title, survey, easements, environmental condition, flood risk, code compliance, and required licenses.
Obtain property-tax reassessment estimates, insurance quotes, utility history, service contracts, and local operating requirements.
Review lender DSCR and debt-yield tests, amortization, maturity/balloon risk, recourse, reserves, covenants, and prepayment penalties.
Stress-test lower rent, higher vacancy and expenses, capital calls, interest rates, and a higher exit cap rate.

Planning estimate only—not an appraisal, lender commitment, investment recommendation, tax analysis, or substitute for legal, accounting, engineering, environmental, insurance, and commercial real-estate advice. Verify all leases, expenses, physical conditions, financing terms, and local requirements before purchasing.