REAL ESTATE ANALYSISCapSharkMethodology and Sources
Methodology version 2026-08-29
Input labels
- User-entered: property, market city, price or value, rent, vacancy, expenses, reserves, proposed loan, rate and underwriting thresholds.
- User-file import: values read from a rent-roll or operating-statement CSV and reviewed in the Deal Room before transfer.
- CMHC-sourced: published MLI Select program thresholds, premiums and Rental Market Survey or forecast benchmarks when explicitly identified.
- CapShark-calculated: NOI, loan capacity, debt service, DSCR, debt yield, cap rate, cash flow, stress cases and projections.
Multifamily Deal Room import
The browser beta accepts CSV, TSV and plain-text tabular exports. Column names are normalized and matched to common rent-roll fields such as unit, type, occupancy status, current rent, market rent, other income and square feet. Operating-statement line descriptions are automatically classified as income, operating expense, replacement reserve, debt service, capital expenditure or excluded. Users can change every operating-statement classification before transfer.
Potential annual rent uses current rent for occupied units and market rent for vacant units. Physical vacancy is the number of vacant units divided by mapped units. Reported NOI uses operating-statement income less lines classified as operating expenses and replacement reserve; debt service and capital expenditures are excluded. The calculator handoff transfers normalized totals, source filenames, row counts and reconciliation notes through local browser storage. Source-file bytes remain on the device in this beta.
Automatic mapping is a convenience, not an audit. Headers, reporting periods, sign conventions, vacancy status and accounting categories can be interpreted incorrectly. Users must compare every mapped value with the source documents. A Deal Room readiness score measures completion and structural checks only; it does not measure property quality, data truth or lender acceptance.
Acquisition and refinance loan sizing
Effective gross income = scheduled rent + other income − vacancy and collection loss. Normalized NOI = effective gross income − operating expenses − replacement reserve. Annual debt service uses level monthly principal-and-interest payments over the entered amortization.
- LTV proceeds: property value × maximum LTV.
- DSCR proceeds: the loan whose annual debt service equals NOI ÷ minimum DSCR at the entered rate and amortization.
- Debt-yield proceeds: NOI ÷ minimum debt yield.
- Estimated maximum loan: the lowest of the LTV, DSCR and debt-yield proceeds.
- Acquisition cash required: purchase price − proposed loan + entered transaction costs.
- Net refinance proceeds: proposed loan − existing loan payout − entered transaction costs. A negative result is shown as cash required.
Outlook and stress cases
Five- and ten-year acquisition and refinance outlooks are automated from the selected market. Where CapShark has a city-specific CMHC 2025 rental benchmark and 2026–2028 rent path, the implied rent growth is used for the first three modeled years and then normalized to 2.0% annually. Listed nearby cities may use a clearly labelled regional proxy. Markets without an attached city path use a neutral 2.0% rent baseline. Operating expenses grow at a 2.5% CapShark baseline. Estimated property value holds the entry cap rate constant against projected NOI; it is not an appraisal or market-value forecast. Modeled debt service remains constant and the mortgage balance follows the entered rate and amortization, so the outlook does not predict renewal pricing. Stress cases change one assumption at a time: rate +1%, rent −5%, or operating expenses +10%.
Value-add refinance plan
The refinance-only planner first estimates the NOI needed for the requested loan under three tests: annual debt service × minimum DSCR, proposed loan × minimum debt yield, and the NOI implied by the required value at the entered LTV while holding the entry cap rate constant. The highest required NOI is converted into scheduled rent after the entered vacancy, other income, operating expenses and reserve. Any required rent increase is allocated across the entered number of renovated units.
Post-renovation NOI uses the planned stabilized rent for the renovated units while holding the remaining units and current operating-cost inputs constant. Stabilized value holds the entry cap rate constant. Post-renovation loan capacity remains the lowest of LTV, DSCR and debt-yield proceeds. The financing-supported renovation ceiling is cash-out available at the modeled maximum loan after the existing mortgage and entered refinance costs. The value-creation ceiling is 80% of modeled value created, retaining a 20% CapShark screening buffer. The lower ceiling becomes the maximum total renovation budget and is divided by renovated units for the maximum spend per door. The buffer is not a lender rule or construction-cost estimate.
Market checks compare planned rent with an attached CMHC average 2-bedroom benchmark or clearly labelled regional proxy. Unit mix may differ materially. Provincial rent-rule notices are short screening reminders only; the calculator cannot determine tenant status, exemptions, vacancy, lawful turnover, above-guideline applications or whether a planned increase is legally permitted.
Other core formulas
DSCR = NOI ÷ annual debt service. Debt yield = NOI ÷ loan amount. Cap rate = NOI ÷ property value or purchase price. Annual cash flow = NOI − annual debt service. Flip calculations use the purchase, rehabilitation, holding, financing and resale assumptions identified in that calculator.
Deal comparison methodology
The free comparison board stores a snapshot of the displayed calculator result in local browser storage. It does not recalculate the deal independently. Capital required and the primary modeled outcome are shown across calculator types, but a flip profit, multifamily annual cash flow and refinance proceeds represent different time periods and economic questions. CapShark therefore does not rank records from different calculators.
When two records use the same calculator, the higher calculator-specific decision score is highlighted. Flip records use the displayed Deal Score. MLI Select records use the displayed program points capped at 100 for comparison display. Acquisition and refinance records use a screening score derived from DSCR cushion, estimated loan-capacity headroom and whether annual cash flow is positive. This comparison score is a prioritization aid only and is not a lender score, credit score, appraisal or investment recommendation.
Limitations
CapShark does not apply every lender's NOI normalization, interest-rate floor, appraisal basis, reserve requirement, borrower covenant, recourse requirement or property-specific adjustment. Citywide rent benchmarks are directional and do not replace a unit-by-unit rent roll or appraisal. Program eligibility, points, premiums and borrower requirements are determined through an approved lender and CMHC review where applicable. Forecasts are scenarios, not predictions or guarantees.
Primary sources
- CMHC MLI Select
- CMHC project funding and multi-unit mortgage financing
- CMHC Rental Market Survey and Housing Market Outlook datasets identified in the MLI Select calculator.
- Alberta rent-increase guidance
- British Columbia rent-increase guidance
- Manitoba rent-increase guidance
- Nova Scotia residential-tenancy changes
- Ontario residential rent increases
- Quebec TAL rent-increase calculation
- Saskatchewan rent-increase guidance
- Office of the Privacy Commissioner of Canada — PIPEDA