Investing in Real Estate
Cap
Rate Basics
The Capitalization
Rate or Cap Rate is a ratio used to
estimate the value of income producing
properties. Put simply, the cap rate
is the net operating income divided
by the sales price or value of a property
expressed as a percentage. Investors,
lenders and appraisers use the cap
rate to estimate the purchase price
for different types of income producing
properties. Read
more.
1031 Exchanges
Thanks to IRC §1031, a properly structured exchange allows an investor to sell a property, to reinvest the proceeds in a new property and to defer all capital gain taxes. Here are the basics you need to to know.
A 1031 exchange has strict requirements that must be met to defer capital gains taxes.
Only 'like kind' investments can be exchanged.
Why Condos?
The risk of investing in rental condominiums
is about the same as investing money
in your own home. The method of investing
is simple and easy to apply with minimal
effort, yet you can average 20% or
move on your investment. Read
more.
Zoning
and Planning
While it's crucial to know how your
municipality's planning and zoning
restrictions affect what you want
to do with your condo, they also are
important when deciding whether to
actually buy a condo. More than a
few people have purchased condos with
remarkable views, thinking they'd
be admiring that scene forever, only
to discover a couple of months or
years later that the view was about
to be turned into a home, office building
or apartment complex. Read
more.
Worksheets
Use these two Excel workbooks to help
determine the investment value. Each
workbook consists of five worksheets
- APOD (Annual Property Operating
Data), CashFlows, Sales, IRR~NPV and
Assumptions. Right click on these
two files to download: Five
Year Forecast and Ten
Year Forecast.
Real Estate Seminars
Be wary of real estate seminars promising
get rich quick schemes. Read these
two articles from the FTC and the
Wall Street Journal before you sign
up:
The Seminar Pitch:
A Real Curveball
Real-Estate Investors
Should Beware of Scams
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