2020 Frankella Ave, Pittsburgh, PA 15221

What is the Investment Calculator?

The Investment Calculator is a built-in deal analyzer available directly from any property on DealScanner. It supports three investment strategies:

• Fix & Flip Analyzes profit potential from buying, rehabbing, and reselling a property
• Buy & Hold (Rental) Projects rental income, operating expenses, cash flow, cap rate, and cash-on-cash return
• BRRRR Models the full Buy, Rehab, Rent, Refinance, Repeat cycle including hard money and refi loans

DealScanner pre-fills the calculator with AI-generated estimates for purchase price, rehab cost, ARV, and rent so you start with a realistic baseline, not a blank form.

How do I open the calculator?

Click the Deal Calculator on any property page. You can choose which strategy to open Fix & Flip, Rental, or BRRRR and the calculator will slide open pre-populated with that property's data.

You can switch strategies at any time from within the calculator panel.

Are the pre-filled numbers accurate?

DealScanner's AI and deep analysis estimates are data-driven starting points based on comparable sales, market trends, and local cost data. They are meant to give you a realistic baseline not a final appraisal. Always verify:

• DealScanner confidence of each analysis
• Rehab costs with a contractor walkthrough
• ARV with recent comps in the MLS
• Rent estimates with local rental listings

What does the Fix & Flip Calculator measure?

It calculates your projected net profit and ROI from buying, renovating, and reselling a property. Key outputs include:

• Net Profit Gross sale proceeds minus all costs (purchase, rehab, closing costs, holding costs, loan fees)
• ROI % Net Profit ÷ Total All-In Investment
• Total Cash Invested Your out-of-pocket cash (down payment + rehab + closing costs + holding costs + loan fees)
• Cash-on-Cash Return Net Profit ÷ Total Cash Invested (relevant when using a loan)

What inputs does Fix & Flip require?

How is ROI calculated?

ROI is calculated on your total all-in investment cost not the ARV:

This gives you a true picture of how efficiently your capital is deployed, regardless of what the property is worth after renovation.

What is the difference between ROI and Cash-on-Cash Return?

• ROI Measures profit relative to the total cost basis (all-in investment). This is the primary metric for all-cash deals.
• Cash-on-Cash Return Measures profit relative to your cash out of pocket. This is most useful when you're using a loan, because a portion of your purchase is financed and your actual cash invested is lower.

When no loan is used, both metrics are identical. When you use leverage, Cash-on-Cash is typically higher than ROI because your equity stake is smaller.

How do closing costs work?

The calculator auto-computes both buying and selling closing costs using DealScanner's formula based on the property's location and size. You'll see the dollar amount displayed as a hint next to the input.

• Buying closing costs are calculated as a % of the purchase price + constant costs. The hint updates live as you change the purchase price.
• Selling closing costs are calculated as a % of the ARV + constant costs.
• You can toggle either input between % mode (percent of price) and $ mode (fixed dollar amount). When in $ mode, the hint turns orange and shows the implied percentage.

How does the loan option work?

If you're financing the purchase (e.g., with a hard money loan), enable the loan section and enter:

• Loan Amount The dollar amount borrowed
• Interest Rate Annual interest rate (%)
• Loan Fee Origination/points fee (enter as % of loan or flat $)
• Loan Duration Tied to your holding period automatically

The calculator uses interest-only payments over the holding period. Loan fees are added to your total cost basis. Your down payment is the difference between the purchase price and loan amount.

What is the MAO Solver?

MAO stands for Maximum Allowable Offer. The MAO Solver works backwards instead of telling you your profit given a purchase price, it calculates the highest price you can pay while still hitting your profit target.

This is the key number to bring to a negotiation or submit as an offer.

How do I set a profit target?

Enter your target as:

• A percentage of total investment e.g., "I need at least 30% ROI"

Why does the MAO change when I adjust ARV or rehab cost?

Because every cost flows into the MAO formula. Higher rehab costs, closing costs, or holding costs all reduce how much you can afford to pay for the property. When you adjust:

• ARV up → MAO increases (more upside)
• Rehab up → MAO decreases (more costs to absorb)
• Target ROI up → MAO decreases (tighter profit requirements)

How are closing costs handled in the MAO Solver?

Buying closing costs in the MAO Solver are always calculated as a percentage of the solved MAO. This is important because closing costs depend on the purchase price which is exactly what's being solved. The calculator handles this circular dependency automatically using an iterative solver that converges to the correct answer within $50.

What does the Rental Calculator measure?

It evaluates a property's performance as a long-term rental investment. Key outputs include:

• Monthly Cash Flow - Net Operating Income minus mortgage payment (if financed)
• Annual Cash Flow - Monthly cash flow × 12
• Cap Rate - NOI ÷ Total Property Cost (purchase + rehab + closing costs). Measures return independent of financing.
• Cash-on-Cash Return - Annual cash flow ÷ Total cash invested. Measures return on your actual cash outlay.
• Net Operating Income (NOI) - Gross rent minus operating expenses (before debt service)
• Gross Rent Multiplier (GRM) - Purchase price ÷ Annual gross rent

What operating expenses are included?

The calculator uses itemized expenses for the most accurate picture. You can configure each line item:

What is the Expense Ratio Override?

For quick screening, you can replace the itemized expenses with a single expense ratio - a percentage of gross rent that covers all operating costs.

The override section is hidden by default. To use it, expand the "Expense Ratio Override" section and enter a percentage (e.g., 40%). The calculator will then use that ratio instead of the itemized line items.

How is the Cap Rate calculated?

The DealScanner cap rate formula includes closing costs in the property cost basis:

This reflects the true all-in cost of acquiring the property, not just the list price - giving you a more conservative and accurate cap rate. Financing is excluded from cap rate (it is a financing-neutral metric).

Does the calculator support financing?

Yes. You can enter a conventional mortgage or portfolio loan by specifying:

• Down Payment - As a % or flat $; calculated on purchase price only (banks do not finance rehab or closing costs)
• Interest Rate - Annual rate (%)
• Loan Term - In years (e.g., 30 years)

The calculator computes a fully amortizing monthly payment and subtracts it from NOI to show your actual cash flow. Leave financing blank for an all-cash analysis.

What does the Rental MAO Solver do?

It calculates the maximum price you can pay for a rental property and still hit a target Cap Rate. Set your target cap rate and the solver works backwards - adjusting the purchase price until the resulting NOI ÷ total cost equals your target.

What target should I use?

A good target cap rate depends on your market and strategy:

DealScanner defaults to your target cap rate, as defined in the Preferences section.

How do expense settings affect the MAO?

Every expense you enter directly reduces your NOI, which reduces the MAO. More conservative expense assumptions (higher vacancy, more maintenance reserves) will produce a lower MAO and vice versa. Always use expenses that reflect your actual operating plan, not best-case projections.

What is the BRRRR strategy?

BRRRR stands for Buy, Rehab, Rent, Refinance, Repeat. The strategy involves:

1. Buy a distressed property below market value, often with a short-term hard money loan
2. Rehab it to increase value
3. Rent it out to create cash flow
4. Refinance with a long-term mortgage at the new (higher) appraised value
5. Repeat use the refinance proceeds to fund the next deal

The goal is to recover most or all of your initial cash investment through the refinance, so your capital is recycled into new deals.

What are the key BRRRR metrics?

What is a "Full BRRRR"?

A Full BRRRR (BRRRR% ≥ 100%) means the refinance loan covers your entire cost basis - you get all of your cash back. In this scenario:

• Cash Left In displays as $0 (full recapture)
• Cash Back at Refi is presented
• Cash-on-Cash Return displays as ∞ (infinite - you have no equity at risk)
• BRRRR% displays as 100%+

This is the ideal BRRRR outcome: you own a cash-flowing rental with zero capital tied up in the deal.

What is the Hard Money loan section?

The hard money (HM) section models your acquisition and rehab financing:

• LTC (Loan-to-Cost) - % of purchase price the lender will finance
• Rehab Holdback - % of rehab cost covered by the loan (drawn in stages)
• Interest Rate - Annual rate on the HM loan
• Loan Period - Months until you refinance
• Loan Fee - Points/origination (% of loan amount)

The HM loan is capped at purchase price + rehab cost - it cannot exceed the total cost basis.

What is the Refi (Refinance) section?

The refi section models your permanent long-term financing:

• LTV (Loan-to-Value) - % of ARV the lender will loan. Most lenders cap at 70-75% on investment properties.
• Interest Rate - Annual rate on the permanent loan
• Loan Term - Years (typically 30)
• Refi Closing Cost - Your out-of-pocket cost to execute the refinance

The refi loan amount is calculated as: ARV × LTV%.

The refi loan terms can be set at the Preferences section

What is the BRRRR MAO Solver?

Set a target BRRRR% (e.g., 70%) and leave the purchase price at zero - the calculator will solve for the maximum price you can pay and still achieve your target capital recovery. Lower BRRRR% targets are more conservative (you keep more skin in the game); higher targets push the MAO up.

What's the difference between ROI and Cash-on-Cash Return?

What's a good ROI for a fix & flip?

Most experienced investors target a minimum of 20-30% ROI on fix and flip deals to account for unexpected costs, timeline overruns, and market risk. DealScanner defaults to a 30% ROI target in the MAO Solver - a commonly used benchmark in value-add markets.

What's a good cap rate for a rental?

Cap rates vary significantly by market type:

• Value-add / cash flow markets: 8-12%+ is achievable and desirable
• Secondary markets: 6-8% is common for stabilized properties
• Primary / appreciation markets: 4-6% is typical; investors accept lower current income for equity growth

There is no universal "good" cap rate - it depends on your market, strategy, and return requirements.

What is DSCR and why does it matter?

DSCR (Debt Service Coverage Ratio) = Lender NOI ÷ Annual Mortgage Payment, where Lender NOI = Gross Rent - Property Taxes - Insurance - HOA. Vacancy, maintenance, and management fees are excluded; lenders treat these as investor-discretionary and do not factor them into their underwriting.

• DSCR above 1.25 - Strong; most lenders approve BRRRR/DSCR loans comfortably
• DSCR 1.0-1.25 - Marginal; the property barely covers its debt; limited cushion
• DSCR below 1.0 - Negative cash flow after debt service; the property costs you money monthly

DSCR is particularly important in BRRRR deals because your refi lender will underwrite based on the property's cash flow, not just the LTV.

Why do my results update automatically?

The calculator recalculates live every time you change any input - with a brief 150ms delay to prevent flickering as you type. You never need to click a "Calculate" button. Every number you see in the results is always current with your inputs.

Down payment vs. loan amount - what is the calculator based on?

Down payment and loan amounts are always calculated on the purchase price only. This mirrors real-world lending - banks underwrite loans based on the property's purchase price (or appraised value, whichever is lower). Rehab costs and closing costs must be funded with your own cash; they are not typically included in a standard purchase loan.

What defaults does the calculator use if I don't fill in a field?

Can I compare Fix & Flip vs. Rental on the same property?

Yes. Use the strategy tabs at the top of the calculator to switch between Fix & Flip, Buy & Hold, and BRRRR at any time. Each strategy maintains its own inputs independently, so you can switch back and forth without losing your numbers.

What does the orange hint on closing cost inputs mean?

When a closing cost input is switched to dollar mode ($), the hint next to the field turns orange and shows the implied percentage of your entered amount relative to the purchase price. This helps you quickly sanity-check whether your fixed-dollar closing cost is in a reasonable range for the property size.

When in percent mode (%), the hint is blue/gray and shows the calculated dollar amount - so you always know the actual cost impact.

Why might the MAO solver show a negative number?

A negative MAO means the deal doesn't work at any purchase price with your current inputs. This typically happens when:

• Rehab costs are too high relative to ARV
• The target ROI or cap rate is very aggressive
• Operating expenses consume most or all of the rental income

Try adjusting your rehab estimate, ARV, rent, or target to find where the deal becomes viable - or move on to a better opportunity.

How precise are the solver calculations?

All MAO solvers converge to within $50 of the mathematically correct answer. Results are rounded to the nearest dollar for display. Percentage outputs are shown to two decimal places. This precision is more than sufficient for real-world offer decisions.

Something doesn't look right in my calculations - what should I do?

First, double-check your inputs - particularly:

• Are your closing costs in % or $ mode? Verify the hint makes sense for your deal size.
• Are insurance and taxes entered as annual amounts (not monthly)?
• Is the Expense Ratio Override section collapsed? If so, itemized expenses are in use - the override does not apply.

If numbers still seem off, contact us at [email protected] with the property address and the inputs you used.

Can I suggest new features for the calculator?

Absolutely. We actively develop the calculator based on investor feedback. Send your ideas to [email protected] - we read every message.

Is the calculator available on mobile?

Yes. The calculator is fully responsive and works on phones and tablets. For the best experience on smaller screens, use landscape orientation when reviewing detailed breakdowns.