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Updated almost 9 years ago,
What info is needed to make an offer?
I am using the method from the Rich Dad Poor Dad book the ABC's of real estate investing, for figuring out offer prices. The equations are pretty simple:
Income= income-vacancy.
NOI=income-expenses.
Cap rate = NOI / comp price.
Offer price= NOI / cap rate.
Also, one of the expenses in the book is replacement reserve. How do you figure out what that needs to be on a monthly or annual basis? I don't know the difference between this and capex. Also do I just ask my realtor to retrieve all of the expenses? They are repairs/maintenance, utilities, taxes, insurance, and the replacement reserve. Seems tedious for the realtor, especially if they are doing this a bunch of times with no payoff. I want to be conscious of their time.
Thanks in advanced for any advice you can give me!