Analyzing an investment property loan
Investor loans rarely look like a standard 30-year mortgage. Lenders and private note holders use interest-only periods to boost early cash flow, and balloons to shorten their exposure: a note might be amortized over 30 years but due in 5, so payments are affordable while the whole remaining balance comes due at year five. This calculator shows the balloon amount and date prominently so you always know what cliff you are walking toward.
DSCR quick-check
The debt-service coverage ratio is simply monthly rent divided by the full monthly payment (PITI). DSCR lenders typically want 1.20–1.25 or better. Enter your expected rent and the calculator color-codes the result: green at ≥ 1.25, yellow between 1.0 and 1.25, and red when rent doesn't cover the payment. Read more in our DSCR guide.
Cash-on-cash return
Cash-on-cash measures the yield on the actual cash you put in: annual cash flow (rent minus PITI minus operating expenses, times 12) divided by total cash invested (down payment + closing costs + rehab). Many buy-and-hold investors target 8–12%. Because interest-only and balloon structures lower the early payment, they can materially improve early cash-on-cash — at the cost of principal paydown.
Structuring the financing yourself as the seller? Use the seller financing calculator or the wraparound mortgage calculator.