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5 September 2014 | 245 replies
So it does not return too much cash flow from an income stand point, but by having a 5% cap rate this in essence means that every marginal dollar of NOI $1 added per month can create a multiple of 20 times in value ($1 / .05 cap = 20) or if multiplied by 12 months in a year, $240 dollars of value in equity.The 10% cap in rural indiana with the same terms as above would have a monthly cash flow of $8261.95 or approximately 22.8% cash on cash return with out factoring depreciation, appreciation, or amortization.10% cap = 10 X multiplier of Net Operating income or NOI so each dollar you can "net," per month by either increasing income or reducing expense creates $1.00 X 12 months X 10 multiplier = $120 dollars of value in equity.So the difference is in how the market cap affects your ability to create "equity," with the lower cap rates you dont need as much increase to create that equity while in the mid west since the cap rates are higher (lower multiplier) you'll need to have in this case double the net income creation to fabricate the same amount of equity growth as in Seattle.If you're trying to reposition and sell for profit, a lower cap market can be better if you find a troubled property with an opportunity to force equity in Seattle since the value multiplier is much higher, 240x.The rural indiana property with a higher cap rate could allow most to live financially free ($8261.95 cash flow per month) while offering a lower 120x value multiplier to create/force equity.So it all depends on your strategy to focus on equity or cash flow and to recognize which "play," you have in front you and whether the juice is worth the squeeze for you personally.
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5 November 2023 | 5 replies
So look up the comps or have an agent look up the comps and figure out what the price per square foot of the comps are, and multiply that number by the square footage of the subject property.
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9 February 2020 | 211 replies
wont judge anyone, but frankly sometimes all we need is a little faith and some action and God can multiply our efforts.
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13 February 2023 | 7 replies
My dad is a Contractor..They add the Materials of how much is it..then He multiply that by four..if the material is $1k labor and materials will be $4k
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2 May 2019 | 32 replies
Multiply your rental income by .5 and you arrive at your net income, or net operating income (NOI).Multiply your NOI by a cap rate.
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14 March 2020 | 21 replies
This has helped my business to look back on the past week or month and see what we need to do to SCALE and multiply our results by 2, 3, 5 etc.
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17 April 2019 | 10 replies
You should’ve able to achieve considerably better than a gross rental multiplier over 8
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7 October 2023 | 6 replies
So today’s money should be between 11 and 60% depending which multiplier you use.
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11 May 2022 | 13 replies
Most of them don't like bidding/doing standard remodels/rehab work and your project is different than most.I always tell people when budgeting rehabs/remodels "Take your most accurate money and time budget, multiply the money by two and the time by four".
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28 September 2023 | 21 replies
I’m curious because as we scale our own PM company, I’d like to think that if these are done well, they would bump up our valuation / multiplier i.e. prospective buyers would value the “how” in addition to the “what”