What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures, Updated Edition by Gallinelli, Frank -- Read -- Imperial Library of Trantor

Index

Cover Title Page Copyright Page Dedication Contents Preface Introduction Part I How to Analyze a Potential Real Estate Deal

1 Do Your Homework: How to Gather the Data Needed to Make an Investment Decision

Property-Related Data

Ask to See the Leases Look at the Property Tax Bill Spot-Check Utility Bills Ask to See the Appropriate Sections of the Seller’s Tax Return Recite the Representations About the Leases and the Schedule of Rent Income in the Offer to Purchase

Market-Related Data

Investigate Comparable Sales Look for Lease Rates and Operating Expense Data Find Out About Local Capitalization Rates

2 Financial Detective Work Before You Buy: Finding the Truth Behind What the Seller Is Telling You

Basic Definitions Analyzing Similar Properties Comparing Expense Ratios The Annual Property Operating Data Form

3 How the “Time Value of Money” Should Influence Your Real Estate Investing Decisions

Real Estate Applications Using Excel to Make Real Estate Calculations What Every Investor Needs to Know About Cash Flow: Calculating the Present Value Evaluating Leases Mortgage Calculations

4 How to Estimate What an Income Property Is Really Worth

Cash Flow and Taxable Income Taxable Income or Loss Cash Flow Before Taxes Cash Flow After Taxes

A Case Study

Resale—How to Forecast the Appreciation Potential for a Property

5 Measuring the Return on a Real Estate Investment

Payback Period, Cash-on-Cash Return, Gross Rent Multiplier, Debt Coverage Ratio Capitalization Rate Derived Capitalization Rate Discounted Cash Flow Internal Rate of Return Financial Management Rate of Return and Modified Internal Rate of Return

The Problems with IRR Financial Management Rate of Return Modified Internal Rate of Return Capital Accumulation Comparison

6 Case Studies: Apartment, Mixed-Use, and Triple-Net Lease

Apartment Building Investment Mixed-Use Property

Retail Tenants Residential Tenants Triple-Net Lease

Part II Thirty-Seven Calculations Every Real Estate Investor Needs to Know

7 Calculation 1: Simple Interest 8 Calculation 2: Compound Interest 9 Calculation 3: Rule of 72s 10 Calculation 4: Present Value of a Future Cash Flow 11 Calculation 5: Gross Rent Multiplier 12 Calculation 6: Gross Scheduled Income (Potential Gross Income) 13 Calculation 7: Vacancy and Credit Loss 14 Calculation 8: Gross Operating Income (Effective Gross Income) 15 Calculation 9: Net Operating Income 16 Calculation 10: Capitalization Rate 17 Calculation 11: Net Income Multiplier 18 Calculation 12: Taxable Income 19 Calculation 13: Cash Flow 20 Calculation 14: Cash-on-Cash Return 21 Calculation 15: Sale Proceeds 22 Calculation 16: Discounted Cash Flow 23 Calculation 17: Net Present Value 24 Calculation 18: Profitability Index 25 Calculation 19: Internal Rate of Return 26 Calculation 20: Price, Income, and Expenses per Unit 27 Calculation 21: Price, Income, and Expenses per Square Foot 28 Calculation 22: Operating Expense Ratio 29 Calculation 23: Debt Coverage Ratio 30 Calculation 24: Break-Even Ratio 31 Calculation 25: Return on Equity 32 Calculation 26: Loan-to-Value Ratio 33 Calculation 27: Points 34 Calculation 28: Mortgage Payment/Mortgage Constant 35 Calculation 29: Principal Balance/Balloon Payment 36 Calculation 30: Principal and Interest per Period 37 Calculation 31: Maximum Loan Amount 38 Calculation 32: Assessed Value, Property Taxes, and Value Indicated by Assessment 39 Calculation 33: Adjusted Basis 40 Calculation 34: Depreciation 41 Calculation 35: Gain on Sale 42 Calculation 36: Land Measurements 43 Calculation 37: Building Measurements—Gross Building Area, Usable Square Footage, Rentable Square Footage, Loss Ratio, Net Rentable Area

Appendix Index

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