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Updated almost 4 years ago,

User Stats

27
Posts
16
Votes
Robert Martinez
  • Investor
  • Houston TX
16
Votes |
27
Posts

How do you add value or create value for your investors?

Robert Martinez
  • Investor
  • Houston TX
Posted

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.

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