CalculateRealEstateROI

Institutional Engine

Risk-Adjusted Return Engine

Score returns relative to deal-level risk — institutional operators rank opportunities this way, not by headline ROI alone.

Deal Inputs

%
$
%
/ 100
%
%
100
/ 100
Excellent
Risk-Adjusted
Opportunity
A+
Portfolio Efficiency
74
Sharpe Proxy
2.78
LTV
72%

Committee Notes

  • → Risk-return profile is institutionally acceptable — clear to proceed with normal due diligence.

Risk-Adjusted Return Guides

Sharpe-Ratio Thinking for Real Estate

Headline ROI ignores leverage and volatility. Apply Sharpe-style logic: returns per unit of risk, not returns in isolation.

Leverage and Risk-Adjusted Return

Leverage amplifies returns — both directions. Above 75% LTV, risk-adjusted return drops faster than headline cash-on-cash rises.

Stress-Testing Vacancy for True Risk-Adjusted Return

An 8% vacancy assumption is generous in soft markets and conservative in hot markets. Always run 12% and 18% stress cases on every deal.