The 8 Numbers Every Deal Must Pass (Or You Walk)

TL;DR

✦ Most investors decide on cap rate and cashflow. That's two of the eight numbers a deal needs to clear. ✦ Below any one floor, the deal isn't a deal — it's a slow-burning loss. ✦ Operators reverse-engineer the max purchase price from the floors. Hobbyists bid up and find out at closing. ✦ The eight numbers are below, with 2026 ranges by market type.

Why two numbers aren't enough

Cap rate values the asset. Cash on cash values your wallet. But neither tells you whether the loan closes, whether the lender's stress test passes, whether the tax reset breaks the model, or whether the worst-case scenario survives.

Eight numbers do.

The deal that clears all eight is uncommon. The deal that clears six and fails two is the deal that ends a portfolio in year three. We've audited over 2,400 underwriting models on the Vricko platform; the failure mode is almost always the same — the investor optimized for the headline metric and ignored the constraint metrics.

The 8 numbers, in the order operators check them

1. DSCR — your loan's survival metric

Floor: ≥ 1.20 for most DSCR products in 2026. Below 1.0, the property doesn't pay its loan. Below 1.20, the lender either denies, reprices to 1-2 points higher, or requires more reserves.

DSCR = NOI ÷ annual debt service. Compute it at base rate AND at the lender's stress rate (usually base + 200bps). Most operators we've seen failing here built their model at today's rate and got destroyed when the appraisal triggered a stress test.

2. Cash-on-cash — your wallet's return

Floor: ≥ 8% in cashflow markets, ≥ 6% in appreciation markets where total return makes up the gap.

Annual cashflow ÷ total cash invested. Total cash includes down payment, closing costs, initial repairs, AND lender-required reserves. The reserves are the line hobbyists skip — and they're 30-40% of the total cash drag.

3. Cap rate — your asset benchmark

Floor: ≥ 6% for Class B, ≥ 8% for Class C in 2026. Below those, you're paying retail in a market that no longer rewards retail.

Cap rate is not a yield. It's a price tag relative to NOI. Use it to compare assets in the same submarket — not to predict your return.

4. Vacancy reality — your local number

Floor: NEVER use 5%. Pull the local. Class C Memphis runs 11-14%. Class B Boise 4-6%. Class A urban Atlanta 7-9%.

The national average is a marketing fiction. Pulling the local zip's actual vacancy rate often shifts net cashflow by $200-400/month. We've seen deals that looked like +$310/mo become −$140/mo on this single fix.

5. Tax reset at sale — your post-close bill

Floor: model the post-reset bill, not the seller's frozen basis.

Most US counties reset assessed value at sale. Florida, Texas, and California are the worst offenders — homestead protection, Prop 13, SB2 caps all freeze the seller's tax bill. After close, you inherit market value taxation. The average understatement is $1,840/year. On a 30-year hold, that's $55K of phantom margin.

6. Insurance — the live quote, not the listed line

Floor: get a binding quote before you offer in coastal/wildfire markets.

Florida insurance has doubled in 4 years. California has tripled in fire-zone markets. The seller's listing shows their grandfathered policy. Yours will be priced on today's risk model — sometimes 60-100% higher.

7. CapEx reserve — the future, on the books today

Floor: 8-12% of gross rent.

Roof replacement. HVAC. Water heater. Sewer line. Each one has a useful life. Each one has a real cost. The reserve is the math of dividing each replacement cost by the useful life and accruing it monthly. Hobbyists skip this line. Operators put it as a hard expense before they look at cashflow.

8. Stress test at +200bps and -10% rent

Floor: deal still clears DSCR ≥ 1.0 and CoC ≥ 0%.

Run the model at today's rate, then run it again with rates up 200bps and rents down 10%. If the deal goes negative under stress, it's a fair-weather deal. Fair-weather deals end portfolios when the weather changes.

Worked example: $315K duplex in Phoenix, 1.4% rent

Inputs: $315K purchase. 25% down. 7.1% rate. Listed rent $4,400/mo. Listed expenses $890/mo. Class B suburb.

The hobbyist run:

• NOI: ($4,400 − $890) × 12 = $42,120
• Cap rate: 13.4% ✓
• Cashflow: $4,400 − $890 − $1,580 PITI = $1,930 ✓
• "Looks great. Pulling the trigger."

The operator run:

• Real vacancy (Class B Phoenix): 7% → −$308/mo
• Tax reset post-sale: +$148/mo expense
• Insurance live quote: +$92/mo
• CapEx reserve: 10% of rent → $440/mo
• PM at 8%: $352/mo
• Real cashflow: $590/mo
• DSCR: 1.31 ✓
• Cash-on-cash: 7.1% ✓ (just clears 6% appreciation-market floor)
• Stress test (+200bps, -10% rent): DSCR drops to 1.04, CoC to 1.8%. Survives. Barely.

Same deal. Same address. The hobbyist saw $1,930/mo. The operator saw $590/mo and a thin margin under stress. Both numbers are right. Only one survives the loan.

The kill-criteria framework

If any one of the eight numbers fails its floor, you have three options:

1. Walk. The cleanest move. The next deal is always coming.
2. Re-price. Compute the max purchase price that pulls the failing number above its floor. Submit that, no higher.
3. Re-structure. Sometimes a different loan product (lower LTV, longer am) fixes DSCR. Sometimes a seller credit fixes CoC. Sometimes nothing fixes it.

Option 1 is the operator default. Option 2 is the patient counter-offer. Option 3 is rare and dangerous — most "creative structures" mask the same failure under different paperwork.

Run this in Vricko

Vricko's Underwriter computes all eight numbers in 60 seconds from a single address. Stress tests run automatically. The kill-criteria check flags any failure before you read the cashflow line.

Open the Underwriter →

Where this connects

The eight-number framework replaces the patchwork of single-metric heuristics that defined 2010-2020 investing. With rates at 7% and insurance at 2× historical norms, multi-number floors aren't optional. They're the new baseline.

If you're still underwriting on cap rate alone, you're underwriting for the market that was — not the one that is.

Keep reading

• Why Your 'Cash-on-Cash' Calculation Is Lying to You
• The 70% Rule, Explained With 2026 Numbers
• BRRRR vs Fix & Flip: Which Strategy Matches Your Cash Position

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