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Updated almost 9 years ago,

User Stats

29
Posts
7
Votes
Chelsey Hamill
  • Realtor
  • Denver, CO
7
Votes |
29
Posts

What info is needed to make an offer?

Chelsey Hamill
  • Realtor
  • Denver, CO
Posted

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!

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