How to read the numbers
(and the Minnesota fine print)

Yes, and no. There are no forms, no email wall, no account, no cookies set by this site and no analytics. Every number you type stays in your browser, and the PDF report is generated on your own device. Nothing about your scenario leaves this site unless you choose to send the PDF to someone yourself.

They are a sample Twin Cities duplex scenario, chosen to be realistic rather than flattering: a sample non-homestead property-tax rate, a sample landlord insurance cost, a 5% vacancy allowance, 8% property management and a maintenance budget of 1% of value per year. Tax, insurance, maintenance and closing costs follow the purchase price until you type your own figure. The sample rate is not a quote. Replace every default with figures from the actual listing, county records, an insurance quote and local rent comps.

Page one is a snapshot of the deal: cap rate, ROI, cash-on-cash return, monthly cash flow, DSCR and your initial investment, with plain-English verdicts and the full purchase, financing, income and expense breakdown. Page two is the hold-period analysis: future value, projected cap rate, total equity, total gain, ROI and CAGR, where the return comes from, a total-return ledger and a cumulative total-return chart. After that comes the year-by-year cash flow table and the disclosures. Ben Musselman’s contact details are on every page, so you can forward it to him, your agent or a partner.

Download the PDF — that is the saved scenario. Because nothing is stored on a server, there is no account to log into and no scenario history; if you change a number, generate a fresh report.

Opinions vary, and the honest answer is “it depends what else you could do with the money.” There is no official benchmark. Some investors accept a lower cash-on-cash return on a property they expect to appreciate, and want a higher one for a heavy-rehab or harder-to-rent deal. A thin first-year cash return can still be part of a reasonable total return once principal paydown and appreciation are counted — and appreciation is never guaranteed — which is why the report shows total return, ROI and CAGR over your hold period, not just cash flow.

Debt service coverage ratio — net operating income divided by the annual mortgage payment — is the metric many investor loan programs are built on. A DSCR of 1.25× means the property earns 25% more than it owes the lender each year. Many investor programs look for roughly 1.20–1.25× or better; some DSCR loans may allow lower with a larger down payment or different pricing. If your DSCR is below 1.0×, the property does not pay for itself.

Because the mortgage is not the only bill. Property tax, insurance, vacancy, maintenance and management can easily take a third to half of the rent on a Minnesota rental. The calculator deducts all of those before the mortgage. A property that “covers the mortgage” but not the reserves will look fine on paper and bleed the first time the furnace dies in January.

Cap rate ignores financing: it is net operating income divided by purchase price, so it compares properties regardless of how they are bought. Cash-on-cash includes financing: it is annual cash flow after the mortgage divided by the cash you actually put in. Cap rate tells you about the property; cash-on-cash tells you about your deal.

More than on a home you will live in. Conventional investment-property loans commonly require 15–25% down depending on the number of units, and 2–4 unit properties sit at the higher end. Rates typically run higher than owner-occupied pricing, and lenders usually want cash reserves after closing. If you plan to live in one unit of a 2–4 unit property, owner-occupied programs with lower down payments may apply — ask Ben which ones could fit. Not everyone will qualify; all loans are subject to credit and property approval.

A loan qualified primarily on the property’s rental income (its debt service coverage ratio) rather than your personal tax returns. It is popular with self-employed investors and people building a portfolio. Pricing and down-payment requirements differ from conventional loans, and not every borrower or property will qualify. Ben can look at the same scenario both ways.

Ben Musselman, a Mortgage Loan Officer with Fairway Home Mortgage (Fairway Independent Mortgage Corporation), NMLS #1600154, working out of the Eden Prairie, Minnesota branch. He is individually licensed in Minnesota, Wisconsin, and Michigan. The calculator is on his site so investors can run the numbers privately before they talk to anyone. When you are ready, call or text him at 651-800-5510 or email [email protected] — and bring the PDF.

No. Depreciation, passive-loss rules, Minnesota non-homestead classification, rental licensing and local rent-stabilization ordinances all affect real returns and all change. This guide explains the concepts; a CPA and an attorney tell you how they apply to you.