Lesson 1 - Key Metrics

Module 4 is your deal-killer filter! I’m Seth, and my $200k duplex deal worked because I ran the numbers like a pro. This crash course teaches you cap rate, NOI, cash-on-cash, and how to spot knock out ROI’s. You’ll get my Deal analyzer (Inside Master Rental Calculator)—the same one that projected my $5M lifetime wealth. Let’s crunch!

Key Metrics

Here’s what matters:

• NOI (Net Operating Income) = Gross Rent – Operating Expenses

• Cap Rate = NOI ÷ Price → Cap rate calculates return IF you were to pay cash for the property.

  • Aim for 6%+ (Most large investors will even go for 3-5% cap rates depending on location)

• Cash-on-Cash = Annual Cashflow ÷ Cash Invested → Download my calculator below to get access to run the numbers!

  • Aim for 12%+ Year 1 (we regularly hit 12–25% with 5% down)

• Total ROI (the real number) → (Annual Cashflow + Principal Paydown) ÷ Cash Invested

  • Aim for 15+%+ Year 1 - this is normal when you house-hack right! Yes - that’s right I said it’s normal for house hacking!

My $200k duplex looked “okay” to most people… until I ran the numbers and saw 61% Year 1 ROI!

My REAL $200k duplex example: (Important Note: this deal still works today @ 6.25% interest (shown below), but I was able to buy this property in 2022 for 3.25 Interest and 0% down, the numbers CRUSHED).

• Cash Invested: $10,000 (5% down payment) + 5,700 (3% closing costs) = $15,700, Cash Invested

• Rent: $1,200/unit → $2,400/mo, 6% Vacancy → $2,256/ mo → $27,072/yr, Gross Rent

• Expenses: $471.33/mo (Insurance, Taxes, Maintenance 5%) → $5,656/yr, Total Operating Expense

• Mortgage P&I: $1,169.86/mo @ 6.25% → 14,038.35/yr, Annual Debt Service

• Net cashflow: $2,256 – $471.33 – $1,169.86 = +$614.81/mo → $7,377/yr, Annual Cashflow

• Principle Paydown: 2,163.35/yr, debt paydown

The calculations:

• Year 1 NOI: = Gross Rent – Operating Expenses

  • 27,072 - 5,656 = 21,416/yr

• Year 1 Cap Rate: = Net Operating Income ÷ Price

  •  $  21,416.00 / 200,000 = 10.71% (well above target)

• Year 1 Cash-on-Cash: = Annual Cashflow ÷ Cash Invested

  • $7,377 / $15,700 = 47% (double target)

• Year 1 Total ROI: (Annual Cashflow + Principal Paydown) ÷ Cash Invested

  • ($7,377) + 2,163.35 = $9,541.00 / $15,700 →60.77%

Action #1: Use my ‘Excel Analyzer’ tab in the Rental Calculator to plug in your numbers. Try 15% down for comparison to see the true power of 5% down.

You now see deals the way millionaires do.
Next lesson: The 60-second “smell test” that kills 99% of garbage deals before you waste a minute.

DOWNLOAD MASTER RENTAL CALCULATOR → Below

Meet with me to check over your deals → BOOK NOW

See you in lesson 2!