RealInvestorX
Rental deal math
Duplexes to fourplexes, unit by unit.
Two- to four-unit buildings still use residential financing, yet they carry more of the costs of an apartment building: shared systems, turnover in several units, and utilities the owner may pay.
The screening question
Cash flow = rent × units × (1 − vacancy − repairs − management) − taxes − insurance − debt serviceUse rent per unit from current listings for the same unit size, and check which utilities the owner pays. Break-even rent per unit shows how much room the deal has before cash flow turns negative.
Example: A $560,000 fourplex renting at $1,550 a unit brings in $74,400 a year. After 26% for vacancy, repairs, and management, then taxes and insurance, net operating income is about $43,700. With 25% down at 7.28%, that is about $760 a month of cash flow and a 1.27 DSCR.
Inputs worth checking
- Rent per unit, not the seller's total pro forma
- Owner-paid water, sewer, trash, and common electricity
- Separate meters, or the cost of not having them
- Turnover costs across several units each year
Small multifamily calculator
Default rate is Freddie Mac's 30-year fixed average for the week of October 1, 2026 (PMMS); investment-property loans usually price higher. Every other default is a placeholder to replace with your deal.
Where small multifamily deals go wrong
Seller pro formas often use top-of-market rent for every unit at once and omit owner-paid utilities. Rent rolls, leases, and utility bills are the documents to request. Properties with five or more units are generally financed as commercial real estate, so this calculator's residential assumptions stop at four units.
Compare your building's rent and price with your metro's medians in rental yield by metro. A free account saves up to five deals so you can compare buildings side by side.