Cash ROI
The normalized all-cash return after the model's property-tax and insurance estimates.
Gem Score methodology
A relative ranking for deciding what deserves deeper diligence.
Gem Score converts four normalized financial signals into one consistent weekly comparison. The formula is deterministic, versioned, and intentionally narrower than full underwriting.
Current formula / gem_mvp_v1
Gem Score = 40% Cash ROI + 30% Cap Rate + 20% Gross Yield + 10% Voucher Rent Strength
Every term in the formula is first min-max normalized from 0 to 100 across the entire current Cash Flow Gems score population. If every row has the same value for a signal, that normalized signal receives 50 for the run.
Weight by signal
What moves the score.
Cap rate
The normalized modeled net operating income divided by purchase price.
Gross yield
The normalized annual HUD voucher-rent benchmark divided by purchase price.
Voucher rent strength
The normalized monthly voucher-rent benchmark within the current scored population.
Implemented financial model
The assumptions included today.
- Annual gross rent = monthly HUD voucher-rent benchmark × 12.
- Property-tax estimate = 1.5% of purchase price.
- Insurance estimate = 0.5% of purchase price.
- Modeled NOI = gross rent minus those two estimates.
- All-cash purchase; no financing in the current formula.
Not included
The facts investors still need.
- Verified taxes, insurance, financing, closing, and holding costs.
- Repairs, capital expenditures, vacancy, management, and utilities.
- Property condition, title, inspection, and local compliance.
- Approved rent, payment standard, rent reasonableness, and tenant details.
- Neighborhood-level operations or future appreciation.
Deterministic ranking order
How equal Gem Scores are ordered.
After Gem Score, the engine sorts by raw cash ROI, cap rate, gross yield, and monthly voucher rent from higher to lower, then by purchase price from lower to higher. A stable internal record identifier provides the final deterministic tie-breaker.
Worked score-only example
How four normalized signals become 71.5.
This is a mathematical example, not a property or current market result.
- Cash ROI
- 80 × 40%
- 32.0
- Cap rate
- 75 × 30%
- 22.5
- Gross yield
- 60 × 20%
- 12.0
- Voucher rent
- 50 × 10%
- 5.0
Total Gem Score: 32.0 + 22.5 + 12.0 + 5.0 = 71.5
Interpretation
Three rules for reading a Gem Score responsibly.
Relative, not absolute
The score describes a property relative to the current scored population, not a universal threshold of investment quality.
Version and date matter
A new listing population or refreshed input can move normalized values even if one property's raw inputs stay unchanged.
Ranking starts diligence
Use the score to prioritize review, then replace modeled assumptions with verified property and operating facts.
Questions investors ask
Limits are part of the methodology.
Is Gem Score an investment recommendation?
No. Gem Score is a screening and ranking tool. It does not verify property condition, title, taxes after sale, insurance, financing, repairs, vacancy, management, utilities, local compliance, payment standards, rent reasonableness, or inspection outcomes.
Is a Gem Score comparable across different weeks?
Not as an absolute performance measure. The inputs are min-max normalized against the current scored population, so a score can change when the comparison population or underlying data changes. Use the dated score version and raw metrics together.
Why are cap rate and cash ROI identical in the current model?
The current MVP model assumes an all-cash purchase with no financing. Under that simplified model, both metrics use the same modeled net operating income divided by purchase price.
Apply the method
Keep the formula beside the evidence.
Cash Flow Gems is for informational and educational purposes only. It is not financial, legal, tax, or investment advice.