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Updated over 8 years ago on . Most recent reply

James Hunt's profile image
James Hunt's profile image
James Hunt
  • Investor
  • from Cleveland, Ohio
  • Member since Oct 24, 2016
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James Hunt's profile image
James Hunt's profile image
James Hunt
  • Investor
  • from Cleveland, Ohio
  • Member since Oct 24, 2016
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James Hunt
  • Investor
  • Cleveland, OH
27
Votes |
96
Posts
Real Estate Deal Analysis & Advice

Help with understanding Cap Rate,Cash Flow etc

James Hunt
  • Investor
  • Cleveland, OH
Posted
Hello BP, I'm looking for some clarity regarding my numbers on a rental I have: House was purchased for 30k Monthly gross rent from section 8 is $750 Mortgage is $365
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Denny Robert's profile image
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Denny Robert
  • Rental Property Investor
  • from St. Louis, MO
  • Member since Sep 13, 2013
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Denny Robert's profile image
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Denny Robert
  • Rental Property Investor
  • from St. Louis, MO
  • Member since Sep 13, 2013
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Denny Robert
  • Rental Property Investor
  • St. Louis, MO
100
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194
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Denny Robert
  • Rental Property Investor
  • St. Louis, MO
Replied

So let's break it down:

Monthly NOI = $750 - $70 = $680

Cap Rate = $680*12 / $30,000 (*100) = 27.2%

Cashflow = $680 - $365 = $315

Annual COC = $315*12 / $2500 (*100) = 151.2%

One thing I would mention is your technically not including all expenses when you're doing the work yourself, such as property management.

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