Real Estate Investing Terms: Net Operating Income

OK, ok, full disclosure, this one is really for me. When recently analyzing a real estate investment opportunity, I added an expense that is not considered an operating expense and it totally through off my evaluation of the #s and almost resulted in a very offensive offer. Sometimes offensive offers are required, but always take … Continue reading Real Estate Investing Terms: Net Operating Income

Real Estate Investing Terms: Cash On Cash Return

When performing the Cash-on-Cash Return napkin test, I won't further analyze anything that is below 12%. The target is 15% and higher but if we can still hit our $100/month cash-flow minimum, we'll consider it with a lower CoCR.   Cash-on-Cash Return or CoCR CoCR = annual cash flow before taxes divided by total cash … Continue reading Real Estate Investing Terms: Cash On Cash Return

Real Estate Investing Terms: Cash Flow [example]

Because we focus on buy & hold rental properties in Pensacola, Cash Flow is the most important metric we look at when considering an acquisition. _____________________________________________________________ Caution: This post goes technical real quick and my geeky side does come out πŸ™‚ Most people, even some experienced Realtors, think cash flow is the gross revenue generated … Continue reading Real Estate Investing Terms: Cash Flow [example]

Real Estate Investing Terms: Capitalization Rate

Cap Rate...it's not science rockets!? Wait, did I say that wrong? _____________________________________________________ Capitalization Rate (Cap Rate for short) is the measurement used to reveal how well a real estate investment will perform or is performing. I look at 3-5 investments in Pensacola a day and Cap Rate is one of the factors I consider when … Continue reading Real Estate Investing Terms: Capitalization Rate