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Updated almost 4 years ago,
How do you add value or create value for your investors?
We like to use a little thing we call the magic formula. $1/Cap Rate = Valuation
At a 6% Cap Rate, Every Dollar of Income is Worth $16.67 in Value. Why this matters to an investor when looking at a syndicator is to forced appreciation or added value. For example $30/month profit on flat-rate utility. On 272 unit property. Would equal $8160 x 12 months = $97,920.00
$97,920/6%= $1,632,000 added value!! This little nugget is definitely a GOLD mine.