If you are trying to decide what to offer on a multi-family in Fall River — or whether to walk away — you need more than a list price and a gut feel. You need an underwrite: income, real expenses, debt, and a defensible price range you can put in writing for yourself, your partner, and your lender.
Featured photo: multi-family buildings on Tuttle Street in Fall River, MA (six-unit style stock — the kind of South Coast asset you underwrite before you write an offer). The numbers below are a teaching model in the Buy & Hold Analyzer, not an appraisal of a specific listing.
That is what Fortified’s free Buy & Hold Analyzer is built for. We use the same stack with clients who are buying buildings on the South Coast. Plug in the deal, read the numbers, stress the offer price, and if it holds up — Save as PDF and send the file with your loan package. If it does not hold up, you just saved yourself a bad closing. Sometimes the best deal is the one you don’t buy.
This walkthrough uses a realistic Fall River six-family in the live tool — not a fantasy pro forma. Screenshots below are the actual analyzer with those inputs.
Key underwriting terms (plain English)
These definitions are how we talk about deals at Fortified. Use them when you read the analyzer, write an offer, or talk to a lender.
Gross rent (scheduled rent)
Gross rent is the total rent if every unit is leased at the rents you enter — before vacancy. On a six-unit building at $1,500 each, gross rent is $9,000/month ($108,000/year). It is the top of the stack, not the cash you will keep.
Vacancy and collection loss
Vacancy is the haircut for empty units, turns, and slow pay. We use a percent of gross rent. A 10% vacancy on $9,000/month is $900/month you do not count as spendable income. Zero-vacancy pro formas are marketing. Underwriting uses a real haircut.
NOI (net operating income)
NOI is the property’s income after vacancy and operating expenses, and before any mortgage payment. In plain terms: start with rent (and other income), subtract vacancy/collection loss, subtract the real cost to run the building — taxes, insurance, management, reserves, owner-paid utilities, snow, landscaping, repairs. What remains is NOI. Lenders, brokers, and serious buyers treat NOI as the spine of the deal because cap rate, DSCR, and cash flow all hang off it. If NOI is fantasy, every “return” under it is fantasy. On our sample Fall River six-family in the Buy & Hold Analyzer, yearly NOI prints about $57,460 on the inputs below — that is the number you argue price and debt against, not the gross rent roll on the flyer. Common mistake: calling money “NOI” after the loan payment. Once debt is paid, you are talking cash flow, not NOI.
Operating expenses
What it costs to run the building before debt: taxes, insurance, management, reserves, owner-paid utilities, snow, landscaping, repairs, and the rest. Do not delete professional management to make a spreadsheet look pretty — if you are not managing it yourself at a real cost of time, price the work.
Debt service
Debt service is the loan payment — principal and interest (P+I) on the mortgage you model. Annual debt service is monthly P+I × 12. It is not an operating expense; it sits under NOI.
DSCR (debt service coverage ratio)
DSCR (debt service coverage ratio) is yearly NOI ÷ yearly debt service (annual principal and interest on the loan you model). It answers one lender-shaped question: does this building’s income cover the note, and by how much cushion? A DSCR of 1.0× means NOI exactly equals the annual mortgage payment. Below 1.0×, the property does not cover debt on paper. Many investment programs on South Coast multi-family look for about 1.20×–1.25× minimum; stronger files clear higher. On the sample six-family at $725,000 list and 75% LTV, the live analyzer shows about 1.29× — above a common floor, with less margin than a glossy OM implies. Common mistake: celebrating small positive monthly cash flow while DSCR sits under the lender’s bar. Cash flow can look “green” and the loan file still be weak. DSCR is the language commitment committees speak — learn it before you fall in love with a porch.
Cap rate
Cap rate (capitalization rate) is yearly NOI ÷ purchase price. It is a simple unlevered yield: how much net operating income you buy per dollar of price, before financing. At a fixed NOI, a lower price means a higher cap rate; a higher price compresses the cap. Cap rate is useful for comparing ask price to income and to other buildings — it is not “the return you pocket,” because it ignores your down payment, rate, and loan term. On the sample Fall River six-family, about $57,460 NOI on a $725,000 list is roughly a 7.93% cap. Whether that is attractive depends on condition, tenancy, deferred maintenance, and true comps — not a Facebook group average. Common mistake: picking a cap rate target first and reverse-engineering fake rents to hit it. Underwrite NOI honestly, then let cap rate describe the price — especially when you are deciding what to offer.
Cash flow
Cash flow (after debt) is roughly NOI minus debt service — what is left each month or year after the mortgage is paid, on the assumptions you entered. Positive cash flow is necessary for most buy-and-hold plans. It is not sufficient if DSCR, reserves, or CapEx are a mess.
Cash-on-cash return
Cash-on-cash return is annual cash flow after debt ÷ total cash to close. It measures yield on the checks you actually write at purchase — typically down payment plus closing costs in a simple model — not yield on the full purchase price. Two deals with the same monthly cash flow can show very different cash-on-cash if one buyer puts 25% down and another puts 40% down. Investors use it to compare levered outcomes and to stress whether the equity check is working hard enough for the risk. On the sample six-family, about $1,079 per month of cash flow is roughly $12,950 per year against about $203,000 cash to close, or near 6.38% cash-on-cash at the modeled list price and loan. Common mistake: quoting cash-on-cash off purchase price, or off down payment only while ignoring closing costs. Use the same cash-to-close definition your underwrite uses so the percentage means something.
Cash to close
Cash to close is the equity you need to bring to purchase on the model — in Fortified’s Buy & Hold Analyzer, primarily down payment + closing costs. Down payment comes from purchase price and LTV (for example, 75% LTV means 25% down). Closing costs are modeled as a percent of price (we often start around 3% for a planning pass; your actual HUD-1 will differ). That total becomes the denominator for cash-on-cash and the reality check for “can we fund this deal?” On the sample Fall River six-family at $725,000 and 75% LTV with 3% closing costs, cash to close is about $203,000 ($181,250 down + $21,750 closing). Common mistake: underwriting returns on down payment alone and discovering at the closing table that points, title, and lender fees blew the cash plan. Model cash to close explicitly before you write an offer or lock a rate.
LTV (loan-to-value)
LTV is the loan as a percent of purchase price. 75% LTV means 25% down. Lower LTV (more down) usually lowers the payment and can lift DSCR — at the cost of more cash to close.
Buying range (offer range)
The analyzer’s buying range holds your income and expenses fixed and slides purchase price. You see how DSCR, cap rate, cash-on-cash, and cash flow change from a low offer through list to a high offer. That is how you test whether the list price sits in reality — and what offer range is defensible before you write a number on a P&S.
The six-family we are modeling
Sample deal for teaching — not a live listing. Built like a Fall River six-unit buy-and-hold underwrite:
- Asset: six-family, Fall River, MA
- Rents: six units at $1,500/month each → $9,000/month gross ($108,000/year)
- List price in the tool: $725,000
- Financing: 75% LTV (25% down), 7.25% interest, 360-month term
- Vacancy: 10%
- Management: 10% of gross — in line with full-service management; see Fortified’s published property management pricing
- Reserves: 3% of gross
- Taxes: $8,000/year
- Insurance: $9,000/year (multi-family insurance is not a $2,400 line item)
- Owner ops (monthly): electric $75, water/sewer $200, snow/landscape $250, repairs $200
Open the analyzer, match those fields, and you should land on the same headline results.
Step 1 — Build income like a lender will challenge it
Gross rent is easy: 6 × $1,500 = $9,000/month. Then apply vacancy. At 10%, vacancy is $900/month. That is the difference between a brochure and a file a credit committee will touch.
If your seller’s rent roll needs miracles, unit-by-unit proof, or “they’ll pay more next month,” model the lower believable number first. You can always run an upside case second.
Step 2 — Expenses: full freight, including management
On this sample the analyzer stacks to about $4,212/month in total expenses, including:
- Taxes and insurance (annual lines converted monthly)
- 10% vacancy and 10% management on gross
- 3% reserves on gross
- Water, electric, snow/landscape, repairs
Management at 10% is intentional. If you plan to self-manage, still price your time — or model a manager for stress. Fortified publishes residential management pricing so owners are not guessing in the dark: property management pricing.
Step 3 — NOI is the number everything else hangs on
With those inputs, the live tool shows:
- Monthly NOI: $4,788
- Yearly NOI: $57,460
That is after vacancy and ops, before the mortgage. If you only take one number from underwriting into an offer fight, take NOI — then argue price and debt against it.
Step 4 — Layer debt: cash to close, payment, DSCR
At $725,000 and 75% LTV:
- Mortgage: $543,750
- Down payment: $181,250
- Closing costs (3%): $21,750
- Cash to close: $203,000
- Monthly P+I @ 7.25% / 360: about $3,709 ($44,512/year)
DSCR on this run is about 1.29× ($57,460 NOI ÷ $44,512 debt service) — above a common 1.25× floor, with less cushion than a lazy listing pitch implies. Monthly cash flow after debt is about $1,079.
Cap rate at list is about 7.93% ($57,460 ÷ $725,000). Cash-on-cash is about 6.38% on the $203,000 cash to close. Those are outputs of assumptions — change rent, vacancy, insurance, or price and they move.
This is effectively underwriting the building the way your lender will: income, expenses, NOI, DSCR, and cash in. When the model is honest, hit Save as PDF in the analyzer and send that summary with your loan package instead of a napkin sketch.
Step 5 — Buying range: what to offer (and when list is fantasy)
List price is a seller’s opening number. It is not market value and it is not your bid. The analyzer’s Buying Range Analysis holds rents and expenses fixed and slides price so you can see:
- Where cash flow stays healthy
- Where DSCR clears a lender-style minimum
- Where cap rate and cash-on-cash still make sense for your standard
- Where the deal flips negative — the walk-away zone
On this sample stack, the tool’s plain-English summary points to a tighter buy than the ask if you want margin: build safety closer to about $675,000, and watch the deal deteriorate as price climbs toward the high end of the range (negative territory above roughly $775,000 on these assumptions). Your job as the buyer is not to bless $725,000 because it is printed on the flyer. Your job is to pick a number the income supports — then write the offer from that range.
How to use it for an offer:
- Enter believable rents and full expenses (including management and vacancy).
- Set your real financing terms (LTV, rate, term, closing costs).
- Read Deal Analysis at list — DSCR, cash flow, cap rate, cash-on-cash, cash to close.
- Read Buying Range — mark your minimum acceptable DSCR and cash-on-cash.
- Choose an offer band (and a walk-away). Put the logic in the PDF for your lender or partner.
If the only way list “works” is 0% vacancy, $2,400 insurance on a six-family, and no manager, the building is not underwritten. The list is overpriced relative to reality — or the rent roll needs proof.
What we tell clients who are buying
- Underwrite before you tour yourself into a bad crush on a porch.
- Model the boring case first; upside is optional.
- DSCR is a lender language — learn it before the commitment letter.
- Offer from a range backed by NOI and debt, not from fear of losing a bidding war.
- Sometimes the best deal is the one you don’t buy. Walking is a valid outcome of a good underwrite.
After the math, operations still matter: screening, turns, vendors, compliance. That is management and brokerage work. The calculator is the gate so you do not finance a story.
Run the tool yourself
Free Buy & Hold Analyzer — also linked from the owners toolkit and calculator hub. No login. Results update as you type. Save as PDF when you want a clean page for your lender or partners.
Want an operator’s second set of eyes after the spreadsheet? Fortified Realty Group — (508) 671-7228. Published management terms live on property management pricing.
Definitions and underwriting FAQs
These are the questions investors and answer engines ask when valuing a multi-family and deciding what to offer. Answers match the definitions above and the live six-family example.
What is NOI on a rental property?
NOI (net operating income) is the property’s income after vacancy and operating expenses, before any mortgage payment. Build it from believable rents, a real vacancy haircut, and full operating costs — taxes, insurance, management, reserves, and owner-paid ops. Cap rate and DSCR both start from NOI. On Fortified’s sample Fall River six-family in the Buy & Hold Analyzer, yearly NOI is about $57,460 on the stated inputs. If NOI is inflated, every return metric under it is inflated.
What is DSCR and why do lenders care?
DSCR (debt service coverage ratio) is yearly NOI divided by yearly debt service (annual P+I). Lenders use it to test whether the building can carry the loan with cushion for vacancy and repairs. Many South Coast multi-family investment programs look for about 1.20×–1.25× or higher. On the sample six-family at $725,000 list and 75% LTV, the live analyzer shows about 1.29× DSCR. Thin DSCR with small positive cash flow is still a weak loan file — DSCR is the language credit committees speak.
What does cap rate mean when I am writing an offer?
Cap rate is yearly NOI divided by purchase price — an unlevered yield on price before financing. At a fixed NOI, a lower offer price means a higher cap rate. Use it to test whether list price fits the income and comps, then still run DSCR and cash-on-cash with your real loan. The sample Fall River six-family at about $57,460 NOI and $725,000 list is roughly a 7.93% cap. Cap rate is not “money in your pocket”; it ignores leverage.
What is cash-on-cash return?
Cash-on-cash return is annual cash flow after debt divided by total cash to close (down payment plus closing costs in a simple model). It measures yield on the equity checks you write at purchase, not on the full price. Two deals with the same monthly cash flow can show different cash-on-cash if down payments differ. On the sample six-family, about $1,079 per month of cash flow against roughly $203,000 cash to close is near 6.38% cash-on-cash at the modeled list and loan. Always use a clear cash-to-close definition so the percentage is comparable.
What is cash to close?
Cash to close is the equity you need at purchase — typically down payment plus closing costs. In Fortified’s Buy & Hold Analyzer, down payment comes from price and LTV, and closing costs are a percent of price, so cash-on-cash uses a real denominator. On the sample Fall River six-family at $725,000, 75% LTV, and 3% closing costs, cash to close is about $203,000. Model it before you write an offer so lender fees and title costs do not ambush the equity plan.
How do I use the Buy & Hold Analyzer to decide what to offer?
Enter honest unit rents and full expenses (including vacancy and management), set your actual loan terms, and read Deal Analysis at list price — NOI, DSCR, cash flow, cap rate, cash-on-cash, cash to close. Then open Buying Range Analysis and slide price while income stays fixed. Mark the band where DSCR and cash-on-cash meet your (and your lender’s) standards, and the price where the deal breaks. Write the offer from that range. If list only “works” on fantasy vacancy or toy insurance, the ask is not supported — renegotiate or walk. Sometimes the best deal is the one you don’t buy.
Can I send the analyzer output to my lender?
Yes. When the underwrite is complete, use Save as PDF in the Buy & Hold Analyzer and attach that summary to your loan conversation. You get a structured view of income, expenses, NOI, debt service, DSCR, and returns — the same categories lenders underwrite on multi-family files. Fortified uses this stack with clients buying South Coast buildings. The PDF is a decision and discussion tool; it is not a loan approval, appraisal, or commitment letter.
How do I underwrite a six-family in Fall River, MA?
Build all six unit rents into gross income, apply a real vacancy rate (we model 10% in the sample), load full operating expenses — taxes, insurance, professional management, reserves, water, electric, snow, repairs — and calculate NOI. Layer purchase price and financing (LTV, rate, term, closing costs) to get debt service, DSCR, cash flow, cap rate, cash-on-cash, and cash to close. Stress the offer with a buying-range table so list price is tested, not assumed. Fortified’s free Buy & Hold Analyzer runs that workflow for up to 20 units at fortifiedrealty.net/calculators/buy-and-hold.
Educational example only. Not tax, legal, appraisal, or lending advice. Always verify rents, expenses, taxes, insurance, and loan terms for the specific asset. Past or sample results do not guarantee future performance.