Methodology
How MyInversorAI analyzes an investment property
MyInversorAI turns a property address and your assumptions into cash flow, return and risk metrics for up to five strategies, then summarizes them in a 0–100 score and a Buy, Review or Avoid verdict. This page explains each step, the data behind it and its limits.
Pipeline
From an address to a verdict, in six steps
The web, iOS and Android apps run the same steps and the same formulas.
- You enter the property
- Type an address, with autocomplete, or start from a ZipFinder listing. Then choose the property type, the strategy and the risk profile (the Free plan uses the Neutral profile).
- Available data is added
- Public records, rent and value estimates and comparable listings are added when the data provider has them for the property. State averages and the national 30-year mortgage rate set the starting assumptions.
- You review the assumptions
- Check and edit the price, down payment, interest rate, rent, taxes, insurance, HOA dues, reserves and costs. You can add a self-reported credit score to see financing scenarios.
- The engine calculates
- Income, operating expenses, NOI, financing, cash flow and the return metrics of the strategy are computed with the formulas listed on this page.
- Score, verdict and readiness
- Each compatible strategy gets a 0–100 score for the selected risk profile. Underwriting rules then decide whether the verdict can be Buy, Review or Avoid, and whether the result is decision-ready or preliminary.
- Explanation and report
- Rule-based explanations name the biggest risk, the biggest lever and a suggested next step. You can save and compare analyses and create a PDF report in English or Spanish.
Inputs
What you provide
The analysis is only as good as these inputs. Values you do not have yet start from the defaults further down this page.
The property
- The address you want to analyze
- Property type, bedrooms, bathrooms, square footage and year built
- Purchase price
Financing and costs
- Down payment, loan term and interest rate, or an all-cash purchase
- Property taxes, insurance, HOA dues and maintenance assumptions
- Optional: a self-reported credit score and scoring model, used only for financing scenarios
The strategy
- Strategy: rental, renovation flip, BRRRR, resale or short-term rental
- Risk profile: Conservative, Neutral or Aggressive
- Strategy figures such as monthly rent, resale value (ARV), rehab budget, holding months, refinance terms or nightly rate and occupancy
Data
Data sources and their limits
MyInversorAI combines your inputs with these sources, named in the Privacy Policy. None of them receives your account identity with a property lookup.
| Source | What it provides | Limits |
|---|---|---|
| RentCast | Public property records, rent and value estimates, comparable rents and active listings | Coverage varies by property; estimates are a reference, not an appraisal or a rent guarantee |
| Geoapify | Address autocomplete and geocoding | Identifies the address; it supplies no prices or rents |
| Mapbox | Maps | Receives the property coordinates only, to draw the map |
| AirROI | ZIP-level nightly rate (ADR) and seasonal occupancy for short-term rentals | Area-level data, not the property’s own booking history |
| FRED (Federal Reserve Bank of St. Louis) | National mortgage rates, Treasury yields, inflation (CPI) and unemployment | National figures; your loan rate depends on the lender and on you |
| Google News RSS and GDELT | Local market news links in Pulse | Public news; availability varies by location |
| State averages | Starting property tax rate, vacancy, management, maintenance and CapEx reserves, and insurance estimates | Averages for the state, not for the property; replace them with real figures |
| You | Price, financing, rent, costs and every choice in the analysis | You confirm what the data cannot: the actual rent, quotes and bills |
Natural-hazard and nearby-place indicators appear only when a supported source has data for the location; an indicator without data is omitted, which does not mean there is no risk.
Defaults
Starting assumptions you can change
Until you enter your own figures, the engine starts from these values. You can change each of them in the analysis, except the fee allowance, which is fixed.
| Assumption | Starting value | Note |
|---|---|---|
| Down payment | 20% of the price | Financed purchase; an all-cash purchase is also available |
| Loan term | 30 years | — |
| Interest rate | National 30-year mortgage average (FRED), when available | A fixed fallback rate applies when it is not; enter the rate you are quoted |
| Closing costs | 3% of the price | — |
| Inspection, appraisal and loan fees | $1,500 | A fixed allowance with no field of its own: it is added to cash invested and to the total cost, and the PDF report lists it |
| Vacancy | State average, or 5% | — |
| Property management | State average, or 8% of rent | — |
| Maintenance reserve | State average, or 5% of rent | — |
| CapEx reserve | State average, or 5% of rent | — |
| Property taxes | State average tax rate × price | Replace with the actual tax bill |
| Insurance | Estimate for the state and property type | Replace with a quote |
| HOA dues | Typical amount for the property type | Confirm with the association |
| Selling costs | 7% of the resale value (ARV) | Flip and resale |
| Maximum allowable offer | 70% of ARV, less rehab and fees | The 70% rule, for flips |
| Monthly rent | The data provider’s rent estimate for the property or its ZIP code, otherwise the state’s rent-to-price ratio | An estimated rent keeps the result preliminary until you confirm it |
Defaults make a first screen possible; they are not facts about the property. Each one you replace with a real figure makes the result more reliable.
Formulas
Metrics and formulas
These are the definitions the engine uses. Annual figures unless the name says monthly.
| Metric | Formula | What it shows |
|---|---|---|
| NOI (net operating income) | Effective gross income − operating expenses | What the property earns before the loan |
| Cap rate | NOI ÷ purchase price | Unlevered yield on the price |
| Yield on cost | NOI ÷ total acquisition cost | Yield on everything you spend to buy, including closing costs and rehab |
| Monthly cash flow | (NOI − annual debt service) ÷ 12 | What is left each month after the loan payment |
| Cash-on-cash return | Annual cash flow ÷ total cash invested | Return on the cash you put in |
| DSCR | NOI ÷ annual debt service | How many times NOI covers the loan payments |
| LTV | Loan amount ÷ purchase price | How much of the price is borrowed |
| Break-even occupancy | (Operating expenses + debt service) ÷ scheduled income | The occupancy needed to cover costs (short-term rentals use nightly rate and margin) |
| Gross rent multiplier | Purchase price ÷ annual gross rent | Price as a multiple of rent |
| Expense ratio | (Operating expenses + replacement reserves) ÷ effective gross income | Share of income spent on operations and reserves |
| Payback period | Total cash invested ÷ annual cash flow | Years for cash flow to return the cash invested |
| Flip ROI | Net flip profit ÷ cash committed during the project | Return of a renovation flip after all costs |
| Maximum allowable offer (MAO) | (ARV × 70% − rehab − fixed fees) ÷ (1 + closing costs %) | The highest price that keeps a flip within the 70% rule |
Strategies
Five strategies, each judged on its own numbers
A strategy’s score uses the components that matter for that strategy, so a flip is not judged by rental cash flow.
- Rental
- Long-term rental. Scored on yield on cost, cash-on-cash return, cash-flow margin, debt coverage (DSCR), expense efficiency and the price against market evidence.
- Renovation flip
- Buy, renovate and sell. Scored on project ROI, net margin, discipline against the maximum allowable offer, holding time and the all-in spread.
- BRRRR
- Buy, rehab, rent, refinance and repeat. Scored on the capital recovered at refinance and on post-refinance DSCR, cash-flow margin and loan-to-value.
- Resale
- Buy and resell. Scored on project ROI, exit margin, net margin, coverage of transaction costs and expected time to sell.
- Short-term rental
- Nightly rental. Scored on yield on cost, cash-on-cash return, occupancy resilience, break-even occupancy, cash-flow margin and debt coverage.
A strategy that does not fit the property type shows a dash instead of a score.
Risk profiles
Three risk profiles
The profile changes how much each component weighs, not the underlying numbers or the hard rules.
- Conservative
- Leans toward stability and lower leverage: debt coverage and risk weigh more.
- Neutral
- Balances return and resilience. The Free plan uses this profile.
- Aggressive
- Favors upside, such as cash-on-cash return and cap rate, and accepts thinner margins.
Paid plans show every strategy under all three profiles side by side in the strategy matrix.
Score and verdict
How the score and the verdict are formed
The score ranks; the underwriting rules decide. A higher score never overrides an Avoid verdict.
- 0–100 score
- Each component is scored on a fixed curve, then the components are blended with the weights of the strategy and the risk profile. Each score also carries a confidence value based on the quality of the evidence.
- Hard rules
- If a deal fails a non-negotiable rule, its score is capped at 49 (Avoid range) or 69 (Review range), whatever the blend says. A rental, BRRRR or short-term rental whose cash-on-cash return is below the 10-year Treasury yield saved with the analysis is capped at 48. The number shown is the capped score, and its color follows the verdict.
- Verdict
- The checks run in order. A score of 49 or lower is Avoid, for a preliminary or a decision-ready result alike. Otherwise, while a required confirmation is missing, such as the recurring costs, the HOA due diligence for a condo, a townhouse or a home with HOA dues, or the financing structure of a financed purchase, the verdict stays at Review, even if a hard rule fails. Otherwise a failed hard rule gives Avoid, even when the rent or other figures are still estimates. A preliminary result that passes the rules stays at Review. A decision-ready result is Buy only when every rule passes and the score is 70 or higher, and Review in every other case.
| Strategy | Avoid when | Buy is possible only when |
|---|---|---|
| Rental, BRRRR and short-term rental | DSCR is below 1.00, or annual cash flow is worse than −10% of effective income (BRRRR uses post-refinance figures) | Monthly cash flow is zero or positive and DSCR is 1.20 or higher (or there is no loan), with rent and costs confirmed |
| Renovation flip | Net ROI is below 3%, or the price is more than 10% above the maximum allowable offer | Net ROI is 10% or higher and the price is at or below the maximum allowable offer |
| Resale | Net ROI is below 3%, net profit is negative, or the sale does not cover transaction costs | Net ROI is 10% or higher and the sale covers transaction costs by at least 10% |
Readiness: how final the result is
Decision-ready
- The required inputs are confirmed. Only these results can rank as a recommendation.
Preliminary
- The numbers can be calculated but rely on estimates, such as a rent derived from area data or a short-term rental without a nightly rate for the property. It cannot become Buy until you confirm them, and it can still be Avoid when the numbers fail a hard rule.
Requires data
- A required input, such as the purchase price, is missing, so no score is shown.
Incompatible
- The strategy does not fit the property type; a dash replaces the score.
The 1.20 DSCR rule is MyInversorAI’s own Buy-eligibility gate, not a lender requirement. Lender requirements vary by loan, property and borrower.
Explanations and reports
Explanations come from rules, reports from the same numbers
Nothing in the explanation changes a number: it is written from the computed results.
- Rule-based explanations
- The biggest risk, the biggest lever, why the deal may work, why it may fail and a suggested next step are generated by fixed rules, so the same inputs always give the same explanation.
- Comparison
- Saved analyses can be compared side by side; the number of properties compared at once depends on the plan.
- PDF report
- A PDF in English or Spanish with the analysis, a checklist tailored to the property type and ten questions for the visit. Realtor plans add client reports with the agent’s name, company and contact details.
Limits
Limits to keep in mind
- Results are estimates based on your inputs and the available data, not appraisals, loan offers or guaranteed returns.
- Data coverage varies by property and area. Missing data lowers confidence and can keep a result preliminary.
- The valuation range is a reference, not a professional appraisal.
- Financing scenarios are indicative, not a loan offer or approval. No credit bureau is checked.
- Short-term rental figures use ZIP-level market data unless you enter the property’s own nightly rate and occupancy.
- The analysis does not replace an inspection, a title search or advice from a licensed professional.
- Features can differ between the web and the installed mobile app while mobile updates are released separately.
Questions
Frequently asked questions about the method
Is the score a recommendation to buy?
No. It is a screening tool that ranks scenarios with your assumptions. Check the numbers with qualified professionals; the final decision is always yours.
Does MyInversorAI check my credit?
No. If you choose to enter a credit score, it is used only to model financing scenarios. No credit bureau is queried and no loan is approved.
Where does the rent estimate come from?
From the data provider’s rent estimates and comparables when they exist, or from the state’s rent-to-price ratio. Either way, an estimated rent keeps the result preliminary until you confirm the rent yourself.
Why does my result say preliminary?
Because at least one input is still an estimate or unconfirmed, such as the rent or a short-term rental’s nightly rate. Confirm it and the result becomes decision-ready; only a decision-ready result can be Buy.
Are the formulas the same on every plan and device?
Yes. The web, iOS and Android apps use the same formulas. Plans change limits and tools, such as risk profiles and the strategy matrix, not the math.
Can I check the math myself?
Yes. The free calculators show each formula with a worked example, and the sample PDF report shows a complete output.
Next step
Try it with your own property
Create a free account to analyze a property with assumptions you can review, or compare the plans first.
Educational information
Estimates, not advice
MyInversorAI provides estimates based on your inputs and on third-party data. They are not financial, investment, tax, lending, legal or appraisal advice, a loan approval or a promise of returns. Verify the numbers with primary documents and qualified professionals before you make a decision; the final decision is always yours.