Portfolio Cash Trap Calculator

Cash traps lock up distributions when DSCR slips. This calculator sizes the trap.

Portfolio DSCR

Trap trigger DSCR

Monthly free cash flow

Expected trap months

Trapped cash

$2,250,000

DSCR breach size

0.05

Distributions lost

$2,250,000

How the math works

Cash trapped = monthly FCF × trap duration when DSCR < trigger.

Cash traps impact sponsor IRR more than face amount. 9 months of trapped distributions during lease-up can cost 100+ bps of IRR. Preempt with DSCR management 3-6 months before trigger.

How to Use

Enter portfolio DSCR.
Enter trap trigger DSCR.
Enter monthly free cash flow.
Enter expected trap duration.
Read trapped cash amount.

Frequently Asked Questions

Trap mechanics?

DSCR below threshold triggers cash sweep — all NOI minus opex goes to lockbox for debt service, reserves, or principal pay-down. No sponsor distributions until cure.

Cure paths?

Return to DSCR above threshold (usually 1.25x) for 2-3 consecutive test periods. Principal paydown from trapped cash accelerates cure. Some cures require formal lender acknowledgment.

Preemptive?

When DSCR approaches trigger minus 5 bps, reduce distributions voluntarily and apply cash to reserves. Looks better to lender than reactive trap; may qualify for covenant holiday.

How often should I rerun this?

Rerun this calculator whenever inputs change materially — new rent roll data, rate moves, loan balance updates, or quarterly operating data. For active deals, monthly refresh is typical. For stabilized assets under monitoring, quarterly is fine. Treat the output as a decision tool, not a one-time answer — market conditions evolve and so should your analysis.