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Model up to four exit plans on the same property. Enter costs and draw timing, loan terms and rents, and get profit, cash needed, return on private money, break-even and stress tests for each plan. Download it as a PDF or JPG report to share with partners and lenders.
A senior loan funds a set share of the purchase and of every construction draw, with points paid at closing and interest-only payments. A private loan covers everything else: the down payment share, closing costs, points, interest, holding costs and the unfunded part of each draw. Private interest accrues monthly.
Each cost is spread evenly from its start month to its end month. Senior interest only runs on money already drawn, so a cost spent late carries less interest than one spent at closing.
Use a sale price, or value the property on income: rents × 12, less vacancy and management, less fixed operating costs, divided by the cap rate. Units rented before the sale also pay down the private loan.
Profit is the sale value minus selling costs and the all-in cost. Private money needed is all-in cost minus the senior loan. Return on private money is profit divided by private dollars in, annualized. Break-even finds the sale price, rent drop or cap rate where profit hits zero.
Does It Pencil? is a free tool from Real Estate Cheat Codes, a D & A Ventures LLC company. Results are estimates for comparing options, not financial, legal or tax advice, and not a guarantee of results. Your inputs stay in your browser.
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