Platform · Glossary
3Y Estimate™.
The price 3Y computes for a specific property and a specific investor goal. It answers a question other valuation tools don't ask: what should you pay to hit your target? It is not a market estimate, and it is not an appraisal.
On a 3Y report, the 3Y Estimate is reported under the label Goal-convergent price in the 3Y Estimate™ section, alongside the goal it was solved against.
What it actually represents
The 3Y Estimate is the price that makes your goal work, based on the current assumptions. Most valuation tools work forward — input a price, output a yield. The 3Y Estimate works backward. Given a target (cash-on-cash return, DSCR, or cash velocity — the three selectable goals), it returns the maximum price at which that target is still attainable under realistic assumptions for taxes, insurance, vacancy, maintenance, and management.
Pay above the 3Y Estimate and you miss your goal. Pay at or below it and you hit it. As the in-product copy puts it: "A higher price needs stronger math: a less aggressive target return, better financing terms, or stronger numbers from the property as it stands today."
The three valuation lenses
The 3Y Estimate is best understood alongside the two industry-standard valuation methods it complements. From the 3Y methodology:
| Method | Starting point | Main question |
|---|---|---|
| Comparative valuation | Similar sales | What has the market paid? |
| Capitalization valuation | Income stream | What value does the income support? |
| Goal-convergent valuation | Investor goal | What price makes this work for me? |
The 3Y Estimate is the output of the third method applied to a specific property. The other two lenses are still in the report — comparative shows up implicitly through location benchmarks, and capitalization is reported explicitly as the Market Estimate. The 3Y Estimate adds the personal decision lens.
What it is not
The 3Y Estimate is not the same as a market estimate. A market estimate (Zestimate, comp-based AVMs, broker opinions) tells you what other buyers would likely pay. The 3Y Estimate tells you what you should pay given your specific objective. A deal can have a $400K market estimate and a $360K 3Y Estimate — meaning if you pay market, you miss your goal by some margin.
The 3Y Estimate is not an appraisal. It is an estimated target purchase price for a property. It is not the same as the opinion of value in an appraisal developed by a licensed appraiser under the Uniform Standards of Professional Appraisal Practice. It should not be relied upon for lending, tax, insurance, or legal purposes.
Important note.
3Y is a decision-support platform. The figures discussed on this page are illustrative and do not constitute investment, legal, tax, insurance, or appraisal advice. 3Y's estimates are not the same as an opinion of value developed by a licensed appraiser under USPAP and should not be relied upon for lending, tax, insurance, or legal purposes.