Before you order a survey, an appraisal or a single inspection, four numbers tell you whether a commercial deal deserves a closer look: the cap rate, the debt service coverage ratio, the cash-on-cash return, and a summary score. You need only a price, a net operating income and your loan terms.
This post walks one example all the way through, with the formula and the arithmetic at each step, using the same math as the Linton Global Deal Analyzer. The example is a retail building in Marion County. The price and loan terms are the inputs we were given; the NOI is an assumption I chose for illustration, picked so the deal lands right at a common lender comfort line and you can see the tradeoff.
Key takeaways
The whole example in six cards
The example deal
Hypothetical. No real address, owner, tenant or lender.
| Property | Retail building, Marion County, FL | Hypothetical |
| Purchase price | $1,850,000 | Given |
| Down payment | 30% = $555,000 | Given |
| Interest rate | 7.0%, fixed | Given |
| Amortization | 25 years, monthly payments | Given |
| Net operating income (NOI) | $138,750 a year | Assumption |
Step 1: Cap rate
What the property earns on its price, before any loan
The cap rate is the unlevered yield: if you paid all cash, the property would return 7.50% a year before income taxes. This 7.50% comes entirely from the assumed NOI; it is not a Marion County cap rate.
What it means to a lender: the lender uses its own appraisal, which may apply its own cap rate to its own view of NOI, and sizes the loan against the lower of the price or the appraised value. In the site’s Loan Quote Generator, the bank and credit union program shows leverage of “up to 70–75%” of value. Our 30% down means a 70% loan-to-value, inside that range only if the appraisal comes in at or above the price.
Step 2: Loan and debt service
What the loan costs each month and each year
That is a standard fully amortizing payment of principal and interest. Divide the annual debt service by the loan and you get the mortgage constant: $109,833 ÷ $1,295,000 = 8.48%. Every dollar borrowed at these terms costs about 8.48 cents a year. Keep that number in mind for Step 4.
Step 3: DSCR
The number most commercial loans are sized on
The debt service coverage ratio says the property earns $1.26 for every $1.00 of loan payments.
What it means to a lender: each lender compares DSCR with its own minimum. The site’s Loan Sizer starts with a 1.25× minimum as its default, and the DSCR calculator notes list 1.25–1.35× for office and retail. Use 1.25× here as an example line, not a market standard.
At 1.25×, this property can carry at most $138,750 ÷ 1.25 = $111,000 of debt service a year. Our $109,833 fits, with about $1,167 of payment room. Turned around, NOI can fall by only about $1,458 a year (about 1%) before DSCR drops below 1.25× ($109,833 × 1.25 = $137,292 of NOI needed).
Lenders also run both tests and lend the smaller amount. At 1.25× DSCR, the coverage test would allow a loan of about $1,308,750 ($111,000 ÷ 0.0848). A 70% LTV allows $1,295,000. Here the two are almost the same, which is what “at the line” looks like.
Step 4: Cash-on-cash
What your own cash earns after the loan is paid
What counts as cash invested: this example, like the Deal Analyzer, uses the down payment only. Closing costs, loan fees and any immediate repairs would add to the cash invested and lower the cash-on-cash return. The figure is pre-tax.
Notice that cash-on-cash (5.2%) is lower than the cap rate (7.50%). That happens whenever the mortgage constant (8.48%) is higher than the cap rate: each borrowed dollar costs more than the property earns on it, so the loan drags the return on your cash down instead of lifting it. That is negative leverage. It doesn’t make a deal bad, but it means the case for buying rests on something other than year-one cash yield, such as rent growth, principal paydown or a better future refinance.
What it means to a lender: lenders size the loan on DSCR and LTV, not on your return. But the $28,917 a year is the cushion between the property’s income and its loan payments, before any reserves you keep outside NOI. A thin cushion is exactly what the DSCR test is checking.
Step 5: CREDDS quick score
How the Deal Analyzer turns three results into one number
The Deal Analyzer blends the three results above into a 0–100 CREDDS quick score. The code scales each result to 0–100 across a fixed band, caps it at 0 and 100, and weights them, with DSCR weighted heaviest:
The analyzer shows 53 / 100 for these inputs, with the label “Moderate — acquire with discipline” and the note “Thin but doable; the business plan has to hold.” Its labels by score are: 70 and up, Attractive; 55–69, Solid; 40–54, Moderate; 25–39, Tight; below 25, Weak (or Underwater when DSCR is under 1.00×). The score uses only price, NOI, down payment, rate and amortization; picking Retail or Marion County doesn’t change it. When you enter your own numbers, the analyzer also shows a separate REOMind analysis panel from an outside service; that panel is not part of the quick score.
What it means to a lender: nothing directly. No lender underwrites to this score. It is a screening shorthand built from the same three numbers a lender will look at, weighted toward coverage. It doesn’t predict how the property will perform, and the full CREDDS underwrite looks at much more (in-place versus pro forma NOI, tax reassessment on sale, insurance and lease risk).
The tradeoff near the line
Same price and loan, three assumed NOIs
Because this deal sits right at 1.25×, small changes in NOI move every result. Here is the same price and loan with the assumed NOI about $9,250 lower and higher. All three NOIs are assumptions for illustration:
| Assumed NOI | Cap rate | DSCR | Cash-on-cash | CREDDS quick score |
|---|---|---|---|---|
| $129,500 | 7.00% | 1.18× | 3.5% | 40 · Moderate |
| $138,750 (example) | 7.50% | 1.26× | 5.2% | 53 · Moderate |
| $148,000 | 8.00% | 1.35× | 6.9% | 65 · Solid |
At $129,500 of NOI, DSCR falls to 1.18×, under the 1.25× example line. A lender using that line would cut the loan to about $1,221,500 ($129,500 ÷ 1.25 ÷ 0.0848), and the buyer would need roughly $73,500 more cash to close at the same price. At $148,000, DSCR is 1.35× and the 70% LTV, not coverage, sets the loan. That is the practical value of the 60-second screen: it tells you which test binds and how much room you have before you spend money on diligence.
Marion County context
County-wide figures, not figures for this property
The site’s market data gives this backdrop for Marion County (home to Ocala). These describe the county as a whole. They say nothing about the example building, its rent or its value:
| Measure | Marion County | Source and as-of |
|---|---|---|
| Population | 400,078 | Census ACS 2020–2024 5-yr [1] |
| Unemployment rate | 5.7% | BLS LAUS, August 2026 [2] |
| Employment (QCEW) | 121,921 (+2.0% y/y) | BLS QCEW, 2025 [3] |
| Average annual pay | $54,546 | BLS QCEW, 2025 [3] |
| Commercial and industrial parcels | 8,976 | FL DOR roll, 2026 preliminary [4] |
| Commercial and industrial building area | 71.0 million SF | FL DOR roll, 2026 preliminary [4] |
| Median year built (commercial and industrial) | 1986 | FL DOR roll, 2026 preliminary [4] |
| Arm’s-length commercial and industrial sales on the roll | 418 | FL DOR roll, 2026 preliminary [4] |
| Median sale price per building SF on those sales | $126 | FL DOR roll, 2026 preliminary [4] |
The sales and $/SF figures are single-parcel, arm’s-length commercial and industrial sales on the current tax roll, excluding hotels, as defined in the dataset’s notes. The example doesn’t specify a building size, so don’t compare its price with the $126 median. More county data is on the Marion County market page, and the Ocala market update covers the county seat.
Run your own deal
Price, NOI, down payment, rate, amortization. That’s it.
The Deal Analyzer runs all five steps the moment you type. Choose Retail and Marion County to see the county context box beside your results. Then, if the deal clears your screen, the Loan Quote Generator shows which loan programs fit it and estimates the payment and DSCR for each.
Linton Global Deal Analyzer
Cap rate, DSCR, cash-on-cash and the CREDDS quick score for any Florida commercial deal, free.
Want a second set of eyes on a real deal? .
Frequently asked questions
What does it mean to underwrite a commercial deal in 60 seconds?+
It means running four quick tests on a price and a net operating income (NOI) before you spend money on due diligence: the cap rate (NOI divided by price), the debt service coverage ratio or DSCR (NOI divided by annual loan payments), the cash-on-cash return (cash flow after debt service divided by the cash you put in), and a summary score such as the CREDDS quick score in the Linton Global Deal Analyzer. It is a screen, not a full underwrite. A lender will still verify the rent roll, expenses, appraisal, insurance and borrower.
How do you calculate DSCR on a commercial loan?+
Divide the property’s annual NOI by its annual debt service. In the worked example on this page, a $1,295,000 loan at 7.0% on a 25-year amortization costs $9,152.79 a month, or $109,833 a year. With an assumed NOI of $138,750, DSCR is $138,750 ÷ $109,833 = 1.26×, meaning the property earns $1.26 for every $1.00 of loan payments.
What DSCR do lenders require?+
Each lender sets its own minimum. The site’s own Loan Sizer calculator starts with a 1.25× minimum DSCR as its default, and the DSCR calculator’s notes list 1.25–1.35× for office and retail. Treat those as planning examples, not a market standard. The example on this page clears 1.25× by only about $1,458 of NOI a year, so a small drop in income or a higher rate would push it under that line.
Is cash-on-cash return the same as cap rate?+
No. The cap rate ignores financing: it is NOI divided by price. Cash-on-cash is the cash left after loan payments divided by the cash you invested. In the example, the cap rate is 7.50% but cash-on-cash is 5.2%, because the loan’s annual cost (about 8.48% of the loan balance at 7.0% over 25 years) is higher than the 7.50% the property yields. This page counts only the down payment as cash invested; closing costs would lower the return further.
What is the CREDDS quick score in the Deal Analyzer?+
It is a 0–100 blend computed in the Linton Global Deal Analyzer from three of your results: cap rate (35%), DSCR (40%) and cash-on-cash (25%). Each is scaled to 0–100: cap rate from 4% to 9%, DSCR from 1.00× to 1.60×, and cash-on-cash from 0% to 12%, capped at both ends. For the example on this page it returns 53, which the analyzer labels “Moderate — acquire with discipline.” It is an educational screen, not an appraisal, a loan decision or a prediction of how a property will perform.
Does choosing Marion County or retail change the CREDDS quick score?+
No. The quick score uses only price, NOI, down payment, interest rate and amortization. Choosing a county adds a context box with that county’s market data, and the property type is carried with your deal if you send it on, but neither changes the score.
Is Linton Global Solutions a lender?+
No. Linton Global Solutions is a Florida-licensed commercial real estate brokerage (FL Broker BK703722), not a bank or lender. The Deal Analyzer and the Loan Quote Generator give educational estimates; every lender sets its own terms and makes its own credit decision.
Works cited
- U.S. Census Bureau, American Community Survey 2020–2024 5-year estimates (Marion County population), as compiled in the site’s fl-market.json, generated 2026-10-13
- U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics (Marion County unemployment rate, August 2026), as compiled in fl-market.json, generated 2026-10-13
- U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (Marion County employment and average pay, 2025), as compiled in the site’s mm-cre.json
- Florida Department of Revenue tax roll (NAL/SDF), 2026 preliminary roll for Marion County, and Florida Department of State (Sunbiz), via LGData; Linton Global calculations, as compiled in the site’s fl-commercial.json, generated 2026-10-30
- Linton Global Market Map: Marion County, FL market data
- Linton Global Deal Analyzer (cap rate, DSCR, cash-on-cash and CREDDS quick score method)
- Linton Global Loan Sizer calculator (1.25× minimum DSCR default)
- Linton Global Loan Quote Generator (bank and credit union program: up to 70–75% LTV, 20–25 year amortization)
Illustrative only. The example property is hypothetical and its NOI is an assumption for illustration, not a market figure. Rates, loan terms, coverage minimums and leverage limits vary by lender, property and borrower; every lender makes its own credit decision. The CREDDS quick score is an educational screen, not an appraisal, a loan offer or a prediction of performance. This is general information, not legal, tax, appraisal, lending or investment advice. Linton Global Solutions is a Florida real estate brokerage (BK703722), not a broker-dealer, investment adviser or lender.
