In this podcast episode, you will learn:

• Cap rate means how you capitalize after all of the expenses (rate at which you get your money back)
• Ratio is purchase price and divide it by NOI
• Cap rate is important because commercial multifamily properties are valued by cap rates instead of their comps.
• It is a function of (buyers perception of) risk. Buyers are willing to pay more if they see area is safe and building is new.
  • Age of propertiy,
  • Credit worthiness of current tenants
  • Diversity of Tenants
  • Length of Leases of current tenants
  • Underlying economy in the area
• Net Operating Income (NOI) - Gross potential rent minus expenses (except mortgage)
• Side note: It is always good to assume expenses (for B and C properties) are a ratio of 50%

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• (https://RodInLosAngeles.com)
• Use the code AdamAdmas for $100 off your tickets

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