Calculating Returns
An asset's performance is strictly dictated by its yield profile. We deconstruct gross revenue, operating expenses, and debt service to present an unvarnished view of actual cash generation.
Cash-on-Cash (CoC) Velocity
CoC return measures the annual pre-tax cash flow divided by the actual initial cash investment. This metric isolates the leverage effect, providing a clear picture of how efficiently deployed equity is performing year over year.
Expense Ratios & NOI Margin
Gross rent multipliers are superficial. We focus on the Operating Expense Ratio (OER). By driving OER down through efficient property management and preventative maintenance scheduling, we artificially expand the NOI margin, directly inflating asset valuation without relying on rent growth assumptions.
| Asset Class | Avg. Expense Ratio | Our Target Ratio |
|---|---|---|
| Class B Multi-Family | 45% - 50% | 38% - 42% |
| Light Industrial | 25% - 30% | 20% - 22% |
| Retail NNN | 5% - 10% | Strict NNN (0% leakage) |
Internal Rate of Return (IRR)
IRR synthesizes cash flow distributions and final sale proceeds into a single annualized yield percentage. Our models stress-test terminal cap rates to ensure our IRR projections remain viable even in moderate economic downturns.