Multiplex Deal Analyzer
Enter the price, income, expenses and financing, and instantly get the cash flow, cap rate, cash-on-cash return, debt coverage ratio — and a clear verdict.
The analysis uses your target offer. Leave it equal to the asking price to evaluate the listing as-is.
Conventional: min. 15% down payment, max. 30-year amortization, no premium.
Gap between current and market rent per unit. The tool estimates cash flow and value after rents are brought to market.
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Analyzing a multiplex deal: the 4 numbers that matter
Buying an income property on a gut feeling is the surest way to make a costly mistake. A good investor "runs the numbers" on a few key indicators before making an offer. This guide explains how to analyze any property in minutes — and how to interpret our tool's verdict.
1. Net operating income (NOI)
Everything starts with NOI: effective income (after vacancy) minus operating expenses (taxes, insurance, energy, management, maintenance), without financing. It is the engine of the property's value and the basis for all other indicators.
2. Cap rate
The cap rate is NOI divided by the purchase price. It measures the property's return independently of financing. On the North Shore, a cap rate of 5% or more is generally attractive, but the "right" rate depends on the area and the property's condition.
3. Cash flow
Cash flow is what remains after paying all expenses AND debt service. Positive cash flow puts money in your pocket each month; negative cash flow costs you money. It is often the number-one criterion for a prudent investor.
Why financing changes everything
Two identical properties can produce opposite results depending on the financing structure. A better rate, a longer amortization, or a different down payment can turn negative cash flow positive. Test these variables in the tool — and compare your scenarios with our financing comparison tool.
4. Cash-on-cash return
The cash-on-cash return compares your annual cash flow to the money you actually invested (your down payment). It answers the question: "how much does my capital earn each year?" A return of 6% or more is often targeted, but appreciation and principal paydown add to that figure.
Debt coverage ratio (DCR)
The DCR (or DSCR) is NOI divided by debt service. It is lenders' favourite indicator: it measures the property's ability to repay its loan. A DCR of 1.0 means exact break-even; lenders typically require at least 1.10 to 1.30.
Benchmarks for a good deal
| Indicator | "Good deal" benchmark |
|---|---|
| Cash flow | positive (≥ 0) |
| Cap rate | ≥ 5 % |
| Cash-on-cash | ≥ 6 % |
| DCR | ≥ 1.20 |
Our tool applies these benchmarks to produce a verdict — but they are only starting points. Your strategy (cash flow, appreciation, value-add) influences what matters most to you.
Common analysis mistakes
- Underestimating expenses: use realistic normalized expenses, not the seller's "optimized" figures.
- Forgetting vacancy: even a fully occupied property should be analyzed with a prudent vacancy rate.
- Ignoring upcoming renovations: a roof or electrical system that needs replacing changes the entire calculation.
- Relying solely on cap rate: a good cap rate with negative cash flow is still a liquidity trap.
- Neglecting DCR: without approved financing, the deal does not exist.
Quick glossary
- NOI: net operating income (income − expenses, excluding financing).
- Cap rate: NOI ÷ price.
- Cash flow: income after debt service.
- Cash-on-cash: cash flow ÷ down payment.
- DCR / DSCR: NOI ÷ debt service.
- Debt service: total annual mortgage payments.
20 answers about analyzing
a multiplex deal
We look at four indicators: cash flow, cap rate, cash-on-cash return, and debt coverage ratio (DCR). Our tool calculates them all and delivers a verdict.
It is effective income (after vacancy) minus operating expenses, without considering financing. It is the basis for valuation and cap rate calculation.
It depends on the area, but on the North Shore a cap rate of 5% or more is generally considered attractive. A higher cap rate indicates a better return relative to price.
It is the money left over after all expenses AND the mortgage payment. Positive cash flow puts money in your pocket each month; negative cash flow costs you money.
It is annual cash flow divided by your down payment. It measures the return on the capital you actually invested. Investors often target 6% or more, not counting appreciation.
It is NOI divided by debt service. A DCR of 1.2 means the property generates 20% more than its payments. Lenders typically require a minimum of 1.10 to 1.30.
Both. The cap rate measures property quality independently of financing; cash flow measures your reality as an owner. A good cap rate with negative cash flow is still risky.
Municipal and school taxes, insurance, common-area electricity, management, concierge, maintenance and repairs. Use realistic normalized amounts, not the seller's optimized figures.
For most investors, yes. Some accept slightly negative cash flow for a property with strong appreciation or value-add potential, but that is a riskier strategy.
Enormously. A lower rate, longer amortization, or different down payment changes debt service and therefore cash flow, cash-on-cash, and DCR. Test multiple scenarios.
Even if the property is fully occupied, it is common to normalize 3% to 5% for tenant turnover and bad debt. Our tool uses 5% by default.
It is the purchase price divided by the number of units. It is a quick benchmark for comparing properties in the same area.
Yes, indirectly. A property requiring major work should be analyzed with the renovation budget in mind. Use our renovation calculator to estimate it.
No. This is a quick analysis based on the numbers you enter. A good investment also depends on the actual condition of the property, the area, the leases, and your strategy.
Negotiate a better price, increase income (rents to market, ancillary revenue), reduce expenses, or optimize financing (rate, amortization, MLI Select).
Yes, significantly. A longer amortization (available with MLI Select) reduces the payment and therefore improves cash flow and DCR. Our tool supports up to 50 years.
No. The tool focuses on operations and financing. The welcome tax, CMHC premium, and closing costs are added to the total initial capital required. See our other calculators.
Yes. The analyzer is completely free, runs in your browser, and collects no data. Analyze as many deals as you like.
Yes, the tool works for all income properties. Note that small plex properties are also valued by comparables and price per unit, not solely by income.
Yes. By seeing your property as a buyer would analyze it, you better understand its value. For a concrete offer, use our offer calculator or contact us directly.
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