Deal Analysis
Separate equity, cash, and cash flow.
A financing structure can look appealing while the underlying deal fails. Use conservative assumptions and verify the numbers before choosing a strategy.
Start with three different questions
What equity exists?
Compare supported value with debt, liens, and the acquisition price. Gross equity is not net sale proceeds.
Explore this topic →What cash is required?
Add seller consideration, arrears, other payoffs, closing costs, repairs, and reserves. Avoid counting existing debt as upfront cash if it remains in place.
Explore this topic →What can operations support?
Compare realistic rent with PITI, operating costs, vacancy, maintenance, and management. Model downside scenarios.
Explore this topic →Educational deal worksheet
Enter nonnegative estimates in dollars, except the percentage fields. This worksheet runs in your browser and does not submit or store these entries. Do not enter private borrower information.
What these estimates exclude
Gross equity does not subtract selling costs, all possible liens, taxes, future repairs, or transaction-specific obligations. Initial cash excludes debt remaining in place; additional required costs may apply. Operating cash flow is before income taxes, depreciation, capital expenditures beyond entered allowances, and future financing changes.
The acquisition spread is value minus total acquisition price. It is a comparison, not a profit forecast. No return, suitability, valuation, or approval conclusion is provided.
Stress-test the exit
- Reduce rent and extend vacancy.
- Increase insurance, taxes, repairs, and operating costs.
- Model an earlier balloon or lender acceleration.
- Test refinance denial and a slower resale.
- Confirm sufficient reserves and a viable contingency.
Discuss conclusions with qualified legal, tax, title/escrow, insurance, and financial professionals.
Your next step
Build the skills behind the structure.
Start with your role and experience, then choose a practical learning pathway.