Platform · Glossary
Goal-convergent price.
The maximum purchase price at which a property still meets a stated investor goal. The 3Y Estimate is what you get when you apply the goal-convergent method to a specific property and a specific goal (cash-on-cash return, DSCR, or cash velocity).
A third lens beside comparative and capitalization
Goal-convergent valuation is positioned alongside the two industry-standard methods:
| 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 first two methods describe what others would pay or what the income would support. The third describes what you should pay given your specific objective. All three are useful; the third is the one most often missing from off-the-shelf calculators.
Forward valuation vs. backward valuation
Almost every property-valuation tool works forward: input a price, output a yield or cash flow figure. Comparable sales tools, cap rate calculators, broker opinions — all of these compute what a property is worth and leave the goal-fitting to the investor.
Goal-convergent valuation works backward: input the goal, output the price that satisfies it. The reasoning starts where the decision actually lives — with the investor's target — and solves for the only number the investor controls: what they're willing to pay.
Why the inversion matters
When you start from a market price and check whether your goal is met, the answer is almost always "no, but the property is still good." The math anchors on price, then bends the goal. When you start from your goal and back into a price, you can't bend the goal — the price either works or it doesn't. Decisions made the second way tend to be more disciplined.
As 3Y's own framing puts it: "That reverse-engineered purchase price is not a promise and not an appraisal. It is a decision point. It helps the investor see whether the asking price, the local context, and their own goals can meet in the same place."
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.