Platform · Glossary
Projected ROI path.
The Projected ROI path is a supporting report projection that shows how modeled gains may build over time through:
- cumulative cash flow;
- principal paydown; and
- potential appreciation.
The report also combines those components into a projected return on the investor’s initial cash invested.
What the report shows
The section leads with the projected 10-year ROI, the equity multiple, and the year the projection first reaches 100% ROI, compared with the roughly 8 to 10 years often associated with reaching 100% ROI through passive investment in U.S. equities (S&P 500). A stacked bar at each of years 3, 5, 7, and 10 shows how appreciation, cash flow, and loan paydown add up, with the projected ROI above each bar, so the investor can compare how the potential capital position changes over time.
Projected ROI is the net gain after upfront costs (closing costs and any make-ready budget), divided by the investor’s total cash invested. The down payment is not subtracted, because it comes back as equity when the property is sold. Closing costs and make-ready do not.
The milestone table separates:
- loan paydown;
- appreciation;
- cumulative cash flow; and
- projected ROI.
Separating the components matters because a projected gain may come from different sources. A property with modest cash flow may show more of its modeled outcome through loan paydown or appreciation, while another property may rely more heavily on operating cash flow.
Assumptions behind the path
The projection uses the deal’s financing and operating assumptions together with modeled rent and home-price growth. Rent and price growth follow the local 10-year compound annual growth rate (CAGR), and never exceed it. Rent growth comes from HUD Small Area Fair Market Rents and home-price growth from the FHFA House Price Index, where available.
Changing rent growth, home-price growth, expenses, financing, vacancy, or the purchase price can materially change the projected path.
Hold, refinance, and sell are possible paths
The 3-, 5-, 7-, and 10-year milestones can help frame possible future hold, refinance, or sale decisions. They do not tell the investor which path to choose or when to act.
Modeled equity does not guarantee accessible cash. A refinance still depends on a future appraisal, lender requirements, interest rates, loan-to-value limits, DSCR, borrower qualification, and closing costs. A sale still depends on future market conditions, transaction costs, taxes, property condition, and a willing buyer.
What it is not
The Projected ROI path is not a promise of appreciation, rent growth, refinancing, sale proceeds, or investment performance. It is an assumption-based scenario intended to make the long-term mechanics of the deal easier to understand and pressure-test.