Deal Calculator: How to Evaluate a Business and make an offer that works for you!

Our free deal calculator will help you evaluate a business quickly and make an offer. This gives you power in knowing how to navigate the important metrics of a business. It also equips you with how to make your offer.

DSCR=Total Debt Service Net Operating Income (NOI)​

Let's translate that:

• Net Operating Income (NOI): For a business or a rental property, this is the total income left after you pay all your operating expenses (like utilities, maintenance, insurance, etc.) but before you pay the mortgage or taxes. It's the cash the business generates from its core operations. (This is like your personal take-home pay).

• Total Debt Service: This is the total amount of all your loan payments for the year (both principal and interest). (This is like your total loan payments).

Long story short; DSCR should be above 1.5 and hopefully, closer to 2.0

Free Cash Flow (FCF) Post-Debt Service

The Core Idea: If DSCR is the score, then FCF post-debt service is the actual prize money. It's the tangible cash left in your pocket after you've paid for everything—both your operating costs AND your loan payments.

Figure out what you want your FCF PDS to be. It should be healthy, especially if you’re investing a lot of money or personally guaranteeing a loan!

This is yet another strong tool to use that is free in our buyers toolbox. Sign up to receive it below.

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