Let get more detailed. Which non biased websites or links in particular indicate employment, increased job growth, increased immigration, favorable employer incentives.
Let say you buy a place for 50% of market value, but it has negative cash flow? Is that a good deal or not?
Buying an Apartment Complex
I routinely get 200 400% annualized returns by flipping houses. All the data and details are on my blog.
Your optimization will only ensure that you not making as bad a deal as other investors; my optimization will ensure that you making intelligent investments.
1. Actual data isn readily available. You can get a seller pro forma statement, seller tax returns, and all the seller invoices/leases, and all you come up with is three different NOIs and three different cap rates based on that information. Seller tend not to be forthcoming with actual data, and even if they were, many probably have Air Max New York
You seem to care more about getting deals below market value, but when it comes to income producing properties, I don see why market value really matters.
You are trying to optimize for price:market value relationship, whereas I would be trying to optimize for cash flow and cash on cash return.
could be a great deal, because it so under valued.
It always about optimization. You just need to make sure you optimizing for the correct variable(s). In this case, you are not.
The goal is a strong return on investment, and if you can get a strong return on investment while paying over market value, then who cares that you paid over market value.
What I am trying to find out is market cap rates, not individual apartment cap rates. When I look at a property I want to know if that property is over or under priced. The market cap rate is one metric to determine this. I also want to find the highest cap rate possible to cover debt service. But it seems to be impossible to find market Air Max 95 Leather cap rates by any category because of the fact that the real estate game is such an inefficient market. I might have to start calling CCIMs individually.
By my reasoning, it a horrible deal, regardless of the price relationship to market value.
Actually, I would argue that real estate markets are incredibly efficient. The reason you can find cap rates easily is two fold:
2. Current cap rate usually isn very interesting. If you find an empty building for $100K, the cap rate is 0%. Does that mean it a bad deal? Of course not. The interesting metric is the cap rate after you improve the property and management. So, even if you could figure out local cap rates, without knowing the condition of all the buildings used to generate the cap rate, it doesn really mean much.
By your reasoning, it Air Max 95 Ultra
favorable employer incentives, etc, and go from there.
I am not investing based on the cap rate alone.
Originally posted by Quincy Wong:Ok show me 100% cash on cash return please. I will jump on it right away.
Hi, Peter is absolutely right. A cap rate in the area? Do you mean that you want to invest based on the capiatlization rate of an area? First of all, such a rate is only applicable to the appraisal process and is not an indication of any specific rate for an individual investor. Your cap rate on any deal, regardless of where it is, is based on your financial position in the deal. Just because rental rates may be higher does not mean your profit or return will be greater. There are forum posts here on BP concerning cap rates and what they mean. Investing based soley on a cap rate is not a good startegy, IMO. Good luck, Bill
no idea what their financials actually look like.
Instead of focusing on an area cap rate, find areas that are seeing increased employment, increased job growth, increased immigration, Air Max Yeezy White
If you could get 100% return then please enlighten me.
By you saying actual data is not readily available indicates that real estate is not efficient. If you look at any thing with a ticker symbol, you can do research with just your computer. You can see the effects of supply and demand by the minute. You cannot do this with real estate. But I am not here to argue. Thank you for your suggestions.
Is all about optimization. And you need numbers to do this.
Market value only indicates what other people have chosen to pay for similar properties in your location in the recent past. It gives no indication of whether those people were smart investors who made good investing decisions or idiots who were throwing their cash away. It also gives no indication of whether you will cash flow or not, or how well you will cash flow.
If you are talking about demographics, what about it? What are the metrics? What constitute a good criteria and why? Then where to look for it specifically? Got a name? Got a link?
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