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Commercial real estate feasibility calculator

Use this commercial real estate feasibility calculator for acquisition cash flow, NOI, DSCR, cap rates, LTV/LTC, equity returns, exit value and downside stress tests.

Method version 1.0.0 · Reviewed November 2, 2026 · Calculated on your device

Your calculation

A transparent acquisition/improvement-and-hold model. Obtain rent, expenses, financing and sale assumptions from actual property records and documented underwriting—not example defaults.

Choose a method, then enter your figures. Examples are illustrative, not recommended settings or rates.

Purchase price (USD)

Contract or proposed property purchase price.

Acquisition closing costs (USD)

Cash transaction costs excluding the separately entered loan fee.

Initial improvements spent at time zero (USD)

All modeled initial renovations; this is not a staged construction draw model.

Property value used for LTV (USD)

Your documented collateral value basis, separate from total project cost.

Year-one full-occupancy potential rent (USD/year)

Annual rent roll before vacancy. Do not enter monthly rent.

Year-one vacancy and collection loss (%)

Share of potential rent not collected; excludes other income.

Other annual operating income (USD/year)

Held constant; include only collectible non-rent operating income.

Year-one operating expenses (USD/year)

Property operating costs including appropriate property tax/insurance/management. Exclude debt, income tax, depreciation and capital reserve.

Year-one capital reserve / cash capex allowance (USD/year)

Deducted separately from NOI to derive cash flow. Avoid counting the same spending in opex.

Annual potential-rent growth (%)

Entered assumption; can be negative.

Annual operating-cost / reserve growth (%)

Entered assumption; other income remains constant.

Holding period (whole years)

1–30 years; must not exceed loan maturity.

Initial loan proceeds (USD)

Cannot exceed purchase + closing + improvements. No future draws or refinancing assumed.

Loan fee paid by equity at time zero (USD)

Financing cash cost, kept out of unlevered project cash flows.

Annual nominal loan interest rate (%)

Fixed rate, compounded monthly with monthly payments.

Loan amortization (whole years)

Used to calculate the level monthly payment; no interest-only phase.

Loan maturity (whole years)

Hold cannot extend past this date; do not assume a refinance will be available.

Annual unlevered project discount rate (%)

Applies to project cash flow before debt.

Annual equity discount rate (%)

Applies to equity cash flows after financing.

Exit cap rate on following-year NOI (%)

Positive entered cap rate; this is not a predicted market rate.

Sale transaction costs (% of sale price)

Deducted from gross modeled exit value.

Your minimum DSCR requirement

A user/lender requirement, not an automatically selected lending rule.

Your maximum LTV (%)

Used only for indicative debt sizing under entered limits.

Your maximum loan-to-project-cost (%)

Independent of LTV. Loan sizing also checks annual modeled NOI and DSCR.

Downside additional vacancy (percentage points)

Use your own assumptions, not industry benchmarks. Percentage changes are relative unless the label explicitly says percentage points.

Downside rent reduction (%)

Use your own assumptions, not industry benchmarks. Percentage changes are relative unless the label explicitly says percentage points.

Downside exit cap increase (percentage points)

Use your own assumptions, not industry benchmarks. Percentage changes are relative unless the label explicitly says percentage points.

Downside income delay (whole years)

No operating income in these first years; operating costs and reserve continue. No monthly leasing schedule.

Upside vacancy reduction (percentage points)

No reduction beyond the entered base vacancy is applied.

Upside rent increase (%)

Use your own assumptions, not industry benchmarks. Percentage changes are relative unless the label explicitly says percentage points.

Upside exit cap reduction (percentage points)

Reduction must leave a positive cap rate; no market forecast is inferred.

How this calculation works

NOI = effective operating income − operating expenses; DSCR = NOI/debt service; exit value = forward-year NOI/exit cap rate. Project and equity cash flows are discounted separately.

What information do I need?

Only fields for your selected method are required. Use consistent units and scope. Changing an entry method or unit system does not convert the numbers already entered. Previously calculated results are cleared when inputs change.

Input definitions and where to find them

Purchase price (USD): Contract or proposed property purchase price.
Acquisition closing costs (USD): Cash transaction costs excluding the separately entered loan fee.
Initial improvements spent at time zero (USD): All modeled initial renovations; this is not a staged construction draw model.
Property value used for LTV (USD): Your documented collateral value basis, separate from total project cost.
Year-one full-occupancy potential rent (USD/year): Annual rent roll before vacancy. Do not enter monthly rent.
Year-one vacancy and collection loss (%): Share of potential rent not collected; excludes other income.
Other annual operating income (USD/year): Held constant; include only collectible non-rent operating income.
Year-one operating expenses (USD/year): Property operating costs including appropriate property tax/insurance/management. Exclude debt, income tax, depreciation and capital reserve.
Year-one capital reserve / cash capex allowance (USD/year): Deducted separately from NOI to derive cash flow. Avoid counting the same spending in opex.
Annual potential-rent growth (%): Entered assumption; can be negative.
Annual operating-cost / reserve growth (%): Entered assumption; other income remains constant.
Holding period (whole years): 1–30 years; must not exceed loan maturity.
Initial loan proceeds (USD): Cannot exceed purchase + closing + improvements. No future draws or refinancing assumed.
Loan fee paid by equity at time zero (USD): Financing cash cost, kept out of unlevered project cash flows.
Annual nominal loan interest rate (%): Fixed rate, compounded monthly with monthly payments.
Loan amortization (whole years): Used to calculate the level monthly payment; no interest-only phase.
Loan maturity (whole years): Hold cannot extend past this date; do not assume a refinance will be available.
Annual unlevered project discount rate (%): Applies to project cash flow before debt.
Annual equity discount rate (%): Applies to equity cash flows after financing.
Exit cap rate on following-year NOI (%): Positive entered cap rate; this is not a predicted market rate.
Sale transaction costs (% of sale price): Deducted from gross modeled exit value.
Your minimum DSCR requirement: A user/lender requirement, not an automatically selected lending rule.
Your maximum LTV (%): Used only for indicative debt sizing under entered limits.
Your maximum loan-to-project-cost (%): Independent of LTV. Loan sizing also checks annual modeled NOI and DSCR.
Downside additional vacancy (percentage points): Use your own assumptions, not industry benchmarks. Percentage changes are relative unless the label explicitly says percentage points.
Downside rent reduction (%): Use your own assumptions, not industry benchmarks. Percentage changes are relative unless the label explicitly says percentage points.
Downside exit cap increase (percentage points): Use your own assumptions, not industry benchmarks. Percentage changes are relative unless the label explicitly says percentage points.
Downside income delay (whole years): No operating income in these first years; operating costs and reserve continue. No monthly leasing schedule.
Upside vacancy reduction (percentage points): No reduction beyond the entered base vacancy is applied.
Upside rent increase (%): Use your own assumptions, not industry benchmarks. Percentage changes are relative unless the label explicitly says percentage points.
Upside exit cap reduction (percentage points): Reduction must leave a positive cap rate; no market forecast is inferred.

Worked example

This example uses the initial method shown in the selector. Load an example in the form to try it.

Example inputs

Purchase price (USD): 1000000
Acquisition closing costs (USD): 30000
Initial improvements spent at time zero (USD): 100000
Property value used for LTV (USD): 1100000
Year-one full-occupancy potential rent (USD/year): 150000
Year-one vacancy and collection loss (%): 8
Other annual operating income (USD/year): 5000
Year-one operating expenses (USD/year): 45000
Year-one capital reserve / cash capex allowance (USD/year): 10000
Annual potential-rent growth (%): 2
Annual operating-cost / reserve growth (%): 3
Holding period (whole years): 5
Initial loan proceeds (USD): 700000
Loan fee paid by equity at time zero (USD): 10000
Annual nominal loan interest rate (%): 6
Loan amortization (whole years): 25
Loan maturity (whole years): 10
Annual unlevered project discount rate (%): 9
Annual equity discount rate (%): 12
Exit cap rate on following-year NOI (%): 7
Sale transaction costs (% of sale price): 3
Your minimum DSCR requirement: 1.25
Your maximum LTV (%): 70
Your maximum loan-to-project-cost (%): 75
Downside additional vacancy (percentage points): 10
Downside rent reduction (%): 10
Downside exit cap increase (percentage points): 1
Downside income delay (whole years): 1
Upside vacancy reduction (percentage points): 3
Upside rent increase (%): 5
Upside exit cap reduction (percentage points): 0.5

Example answer: Project NPV — unlevered pre-tax = 167,633.78 USD

Use the result well

Acquisition/renovation hold model, not a full construction draw or lease-by-lease underwriting system. All entered operating figures are YEARLY. NOI excludes debt, income taxes and capital reserve; reserve is subtracted separately from cash flow. Other income is held constant.

Monthly fully amortizing fixed-rate loan, no interest-only period, refinancing, prepayment penalty or additional borrowing. Exit loan principal is repaid once; principal in regular payments is not also subtracted from project cash flow. Loan fee is an equity financing cash outflow, excluded from unlevered project cost.

Exit value uses year-after-sale NOI divided by entered exit cap rate; negative forward NOI produces zero modeled exit value, not an appraisal. Downside delay means whole YEARS with no operating income while expenses continue; it is not monthly lease-up simulation.

Maximum debt uses your own limits, no bank approval threshold. Break-even occupancy assumes fixed entered opex/reserve/debt and can exceed 100% or be negative; those results are informative, not clipped away.

All amounts are USD. Results are conditional on your inputs, timing and definitions; no tax rules, incentives, market rates, legal eligibility or lending approval are inferred. Base/downside/upside are entered scenarios, not probabilities or forecasts.

IRR is reported only for a conventional initial outflow followed by nonnegative net inflows, within the stated bracket. Multiple-sign-change flows still have NPV and may have MIRR, but no misleading unique IRR. Payback is the first period-end recovery and may be followed by later deficits.

Review the limits shown with each result. Browser arithmetic has finite precision; small differences may reflect rounding. Print or download important results before closing the tab. This workspace does not store projects online or replace an approved examination calculator, engineering design or professional judgment.

Method and sources

References support the stated mathematical concepts; the interface and implementation are original. Publishers do not endorse this site.