Every weight, every cut-off, every formula, and the limits of what a grade can tell you. If you disagree with a number here, change it in the calculator and the grade moves with you.
Most deal calculators will not tell you how they score. That makes their output impossible to check, and impossible to disagree with. Everything DealGauge does is below, in full, including the weights and the cut-offs. If you think a weight is wrong for how you invest, change the input it depends on and watch the grade move.
| Factor | Points | Full marks at | Zero at |
|---|---|---|---|
| Monthly cash flow after every expense | 35 | +$450/mo | -$150/mo |
| Cash-on-cash return | 30 | 12% | 0% |
| Financeable (lender DSCR on gross rent) | 20 | 1.25x | 1.00x |
| Cap rate (DealGauge basis, net of a CapEx reserve) | 15 | 5% | 0% |
Each factor scores on a straight line between those two points, so a deal at +$150 a month earns half the cash flow points. Cap rate points are capped at half if monthly cash flow is negative, because a good cap rate on a property that loses money every month is not a good deal.
Why these bands are wide. An earlier version awarded full cash flow marks at +$250 and full cash-on-cash marks at 8%. The effect was that almost every deal landed on A or F and the middle three letters barely existed, which makes a five-letter scale dishonest. The ceilings are now set where a genuinely excellent deal sits rather than where an acceptable one does, so B, C and D describe real, distinguishable outcomes.
Why cap rate takes full marks at 5% and not 6%. Our cap rate is net of a capital expenditure reserve, so it reads roughly a point below a broker-quoted cap rate on the same property. The benchmark our guides quote, roughly 6% or higher, is a broker-basis figure. Grading at 6% on our own stricter basis would have demanded about a 7% broker cap rate, a full point harsher than the number we publish. Full marks sit at 5% on the DealGauge basis, which is the same property as a 6% broker cap, so the benchmark and the grade measure the same thing. This ceiling is the deliberate exception to the paragraph above: it sits at the published benchmark rather than above it, because what is being corrected here is the basis, not the level of ambition.
Why the coverage factor uses the lender's DSCR and not the strict one. The strict DSCR (net operating income over the principal and interest payment) is arithmetically almost the same information as cash flow and cash-on-cash: when one goes to zero, all three do. Scoring it three times made the grade a pass or fail switch. The lender DSCR (gross rent over the full payment including taxes, insurance and HOA) answers a genuinely different question, namely whether anyone will lend against this, and it does not move with vacancy, maintenance, capital expenditure or management assumptions. Both numbers are still shown on screen. Only the lender one is scored.
If you enter a purchase with no loan, the coverage factor does not apply and the remaining three are rescaled to 100.
| Score | Grade | What it means |
|---|---|---|
| 85 to 100 | A | Strong, with real cushion |
| 70 to 84 | B | Solid, with a thin cushion |
| 55 to 69 | C | Marginal. Thin margins in every direction |
| 40 to 54 | D | Barely breaks even, and only if nothing goes wrong |
| Below 40 | F | Does not pay you at this price and rent |
It does not reward appreciation. Appreciation is a hope, not a plan, and a grade that leans on it would flatter every deal in a rising market. The score is built entirely on today's cash position.
It does not see risk. This is the most important limitation on this page. A 1958 property in a county losing population and a 2016 build in a growing metro, with identical price, rent and expenses, receive an identical grade. The grade measures the arithmetic, not the asset. It cannot see the roof, the street, the tenant, the insurability, or how quickly you could sell. Treat it as a screen that tells you what is worth visiting, never as a verdict on whether to buy.
It does not know your market. Every default in the calculator is a national rule of thumb. Your county's tax rate, your insurance quote and your actual achievable rent will all differ, and all three are fields you can change.
Spreadsheets have defects. Ours have had four that we know of, all found on 9 August 2026 and all repaired: a divide-by-zero when the target monthly cash flow was set to zero, a percentage convention on the Compare Deals tab that read 0.25 as a quarter of one percent, a Scenarios tab that could show the conservative case beating the base case (repaired in two rounds: the 9 August repair fixed the vacancy path, and a follow-up fixed the appreciation path, where the conservative case had been floored at zero growth while the base case was not. The file on sale carries both repairs, and we verified the negative-appreciation path by full recalculation on 16 August 2026 before putting it back on sale), and a BRRRR tab that could report more than one hundred percent of capital recovered. Each was reproduced before the fix and re-tested after it, and every other figure was verified unchanged by full recalculation.
The standing commitment. We do not sell a file while we know something in it is wrong. If a defect is found after you have bought, we will tell you, we will fix it, and you get the corrected file free, because updates are free forever and that is the point of owning the file rather than renting a login. Inside the first 30 days you can take a refund instead if you would rather. Ask us at any time what we currently know to be wrong and you will get a straight answer, at [email protected].
Most tools solve for one target. We solve three and report whichever binds first, because the lowest of the three is the only price that satisfies all of them.
Property taxes are treated as a rate against the purchase price rather than a fixed dollar amount, because taxes usually reset to what you paid once the sale closes. That means the tax bill moves as the walk-away price moves, which is the correct behaviour and something most calculators get wrong.
Our net operating income sets aside a capital expenditure reserve before the cap rate is calculated. A broker's cap rate almost never does. On the same property our figure reads roughly a point lower, so a 5% DealGauge cap rate is about a 6% broker cap rate. If you are comparing our number to one on a listing sheet, add the point back before you decide they disagree. That conversion is why the cap rate factor above awards full marks at 5% rather than at the 6% our guides quote: 6% on a listing sheet and 5% here are the same building.
The defaults are widely used rules of thumb: vacancy at 5 to 8 percent of rent, maintenance at 8 to 10 percent, capital expenditures at 8 to 10 percent, and property management at 8 to 10 percent. They are starting points, not truth. Your own numbers should replace them, and the calculator is built so that they can.
Now grade a deal with these formulas
General information and educational content only, not investment, tax or legal advice. Benchmarks are common rules of thumb, not guarantees or projected results. Verify every figure and consult a qualified professional before purchasing any property. DealGauge is operated by Velocity Workflows. Questions: [email protected]