16 terms you need to know in commercial real estate:1.Internal Rate of Return (IRR): A metric used to estimate the annualized return on an investment based on the timing and magnitude of cash flows.2.Cash-on-Cash Return: The annual income generated by a property expressed as a percentage of the initial cash investment.3.Discount Rate: The rate used to discount future cash flows to their present value in financial models; often represents the required rate of return.4.Capital Expenditures (CapEx): The funds set aside for property improvements, renovations, or major repairs.5.Gross Operating Income (GOI): The total income generated by a property before subtracting operating expenses.6.Operating Expenses: The costs associated with managing and maintaining a property, including utilities, taxes, insurance, and maintenance.7.Debt Service Coverage Ratio (DSCR): A measure of a property’s ability to cover its debt payments, typically calculated as NOI divided by debt service.8.Loan-to-Value (LTV) Ratio: The ratio of the loan amount to the property’s appraised value, used to assess risk in financing.9.Equity Multiple: A measure of the total return on an investment, calculated as the ratio of total cash flows to initial equity investment.10.Residual Land Value: The estimated value of land after deducting development costs and desired profit margins.11.Sensitivity Analysis: A technique used to assess how changes in key variables (e.g., rent, expenses, interest rates) affect financial model outcomes.12.Operating Pro Forma: A projection of a property’s income and expenses over a specified period, typically used for budgeting and financial analysis.13.Cash Flow Waterfall: A structured distribution of cash flows to different stakeholders in a real estate project, often involving equity investors, lenders, and developers.14.Leverage: The use of borrowed funds (e.g., a mortgage) to finance a real estate investment, potentially amplifying returns but also increasing risk.15.Equity Investment: The amount of money invested by equity partners or investors in a real estate project. 16.

The COGS Account subtracts all the cost of the home, including the price you paid for the home, from the Selling Price of the home giving you a New Profit which you will be taxed on.  

When you say the buyout should be 50% of the 92k, would the mortgage first be subtracted from the 92k?  

So the way to think about it is add some flat amount to your PITI for maintenance, subtract that from how much rent you are collecting, and see if that's more or less than what you'd otherwise pay in rent for something similar.

Each house produces $12k annual gross rents and $6k annual NOI after expenses (NOI - not cash flow, so mortgage not yet subtracted out).

We did this to help shake out any kind of problems that might come up and get their opinions on what we needed to add, subtract or change.Having said that, we only had a handful of takers.

Joe, it was a previous post, not the deal you posted so much.No, it's not that simple, what you're thinking is logical but not accurate simply subtracting loan payments and adding all the overage to your side of the cash you used, at least as a COC analysis, but in the end, as to your profit, it's all good. :)

What you need to do is add up all the things you own that are worth more than say $10k each and then subtract everything you owe.

I bought many properties while I was working and rented them and put them on my Schedule E tax return and subtracted the expenses for each property and was not a problem.

Find out your (ARV) After repair value from recently renovated 6 bed 2 baths in your area, and then subtract that by the cost of repair and acquistion price.