How it works
Write the cash list first. Then decide what the page is measuring.
- Line up identity: size, dates, term, type.
- Fill money lines from the sketch and from questions.
- Mark every unknown.
- Normalize what you can.
- Do not rank on unknown extras.
Formula in words. LOI compare = rebuilt stacks + unknown list + next questions.
| Input | Meaning |
|---|---|
| LOI rent | The sketch sticker |
| Lease type | Gross, modified, or net |
| Credits | If stated |
| Unknowns | What the sketch skipped |
Worked example
Here is a teaching sample. It is not customer data and not a result from a live client.
Lease A start rent$38,500
Lease B start rent$35,805
Discount rate8%
Sample NPV A$360,698
| Metric | Lease A | Lease B |
|---|---|---|
| Start rent | $38,500 | $35,805 |
| Year-1 extras | $10,500 | $11,235 |
| Year-1 credit | $10,000 | $5,500 |
| Sample NPV | $360,698 | $350,067 |
| Year | Rent | Extras | Credit | Cash out | Value today |
|---|---|---|---|---|---|
| Year 1 | $38,500 | $10,500 | $10,000 | $39,000 | $36,111 |
| Year 2 | $39,655 | $10,815 | $0 | $50,470 | $43,270 |
| Year 3 | $40,845 | $11,139 | $0 | $51,984 | $41,267 |
| Year 4 | $42,070 | $11,474 | $0 | $53,544 | $39,356 |
| Year 5 | $43,332 | $11,818 | $0 | $55,150 | $37,534 |
| Year 6 | $44,632 | $12,173 | $0 | $56,805 | $35,797 |
| Year 7 | $45,971 | $12,538 | $0 | $58,509 | $34,139 |
| Year 8 | $47,350 | $12,914 | $0 | $60,264 | $32,559 |
| Year 9 | $48,771 | $13,301 | $0 | $62,072 | $31,051 |
| Year 10 | $50,234 | $13,700 | $0 | $63,934 | $29,614 |
| Sample NPV | — | — | — | — | $360,698 |
How to read the sample
Sample NPV for LOI-rebuild sample is about $360,698. A second path lands near $350,067. That gap is a talking point, not a promise.
Year notes for LOI-rebuild sample
- Year 1 of LOI-rebuild sample has rent of $38,500.
- Shared building cost is $10,500.
- A credit of $10,000 lowers the cash you pay that year.
- Cash out this year is about $39,000. The sketch promised a credit here.
- Later cash gets a shrink for time. At 8 percent, year 1 is worth about $36,111 today.
- Next, year 2 rent is $39,655.
- CAM, which is a shared building cost, is $10,815.
- There is no credit in this year.
- You pay about $50,470 this year after extras and credits. Year two is where skipped extras appear.
- Time shrinks later cash. At 8 percent, year 2 is worth about $43,270 today.
- Then year 3 rent is $40,845.
- Extras for the building come to $11,139.
- Credits skip this year.
- The net cash this year is about $51,984. The bump may not even be in the LOI.
- Waiting has a price. At 8 percent, year 3 is worth about $41,267 today.
- After that, year 4 rent is $42,070.
- The shared building cost this time is $11,474.
- No extra credit shows up this year.
- Cash out this year is about $53,544. Later years are guesswork until the lease draft arrives.
- Later cash gets a shrink for time. At 8 percent, year 4 is worth about $39,356 today.
- In year 5 of LOI-rebuild sample, rent is $43,332.
- Shared building cost is $11,818.
- There is no credit in this year.
- You pay about $55,150 this year after extras and credits. The last year still needs a stated term.
- Time shrinks later cash. At 8 percent, year 5 is worth about $37,534 today.
- Year 6 of LOI-rebuild sample has rent of $44,632.
- CAM, which is a shared building cost, is $12,173.
- Credits skip this year.
- The net cash this year is about $56,805. Keep this later year in the sum for the sample.
- Waiting has a price. At 8 percent, year 6 is worth about $35,797 today.
- Next, year 7 rent is $45,971.
- Extras for the building come to $12,538.
- No extra credit shows up this year.
- Cash out this year is about $58,509. The row still belongs in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 7 is worth about $34,139 today.
- Then year 8 rent is $47,350.
- The shared building cost this time is $12,914.
- There is no credit in this year.
- You pay about $60,264 this year after extras and credits. Keep this later year in the sum for the long path.
- Time shrinks later cash. At 8 percent, year 8 is worth about $32,559 today.
- After that, year 9 rent is $48,771.
- Shared building cost is $13,301.
- Credits skip this year.
- The net cash this year is about $62,072. The row still belongs in the sum for the long path.
- Waiting has a price. At 8 percent, year 9 is worth about $31,051 today.
- In year 10 of LOI-rebuild sample, rent is $50,234.
- CAM, which is a shared building cost, is $13,700.
- No extra credit shows up this year.
- Cash out this year is about $63,934. Keep this later year in the sum for the long path.
- Later cash gets a shrink for time. At 8 percent, year 10 is worth about $29,614 today.
Add those year values. The sample NPV for LOI-rebuild sample is about $360,698. This is a teaching sample, not a client result.
Trusted sources
These are public references. They are not endorsements and not client results.