Property Flip or Hold – How to Calculate Purchase Price Based on Nearby Area Cap Rate

How to Calculate, Property Flip or Hold, Real Estate Investment

Calculate property value based on Nearby Area Cap Rate and property Yearly NOI. Used for commercial properties, Multi-Family 5-units and above. Net Operating Income ÷ Nearby Cap Rate ———————- = Property...

Property Flip or Hold – How to Calculate Hold Assumptions Rent – Mo. Projections

How to Calculate, Property Flip or Hold, Real Estate Investment

Gross Income – Total income of rent received from tenants to pay for the space. Vacancy Rate % – The percentage of time rental income is lost due to a property being not rented. Usually between 5% to 10% of the Gross Income. Other Income – Any...

Property Flip or Hold – How to Calculate Net Yield

How to Calculate, Property Flip or Hold, Real Estate Investment

Net Yield – Measures yearly cash flow to the after repair value (ARV). This metric takes into account all of the expenses including the debt service. Yearly Cash Flow ÷ After Repair Value —————————— =...

Property Flip or Hold – How to Calculate Debt Yield

How to Calculate, Property Flip or Hold, Real Estate Investment

Debt Yield – Measures yearly net operating income (NOI) to the loan amount. This metric is used to determine the risk of a loan. Provides lenders a measure of risk independent of interest rate and amortization periods. Yearly Net Operating Income ÷ Loan Amount...

Property Flip or Hold – How to Calculate Debt Coverage Ratio

Real Estate Investment

Debt Coverage Ratio – Measures cash flow by comparing net operating income (NOI) to the debt service (PI). A DCR (also known as DSCR debt service coverage ratio) of 1 means you have an equal amount of income and debt which leaves no room for surprise expenses. A...