Net Operating Income/
The current value of asset
For real estate acquisitions this means your total cost of acquisition plus rehab/repair expenses (if applicable)
* personal goals and income tax strategies
* the condition, location &/or potential added value
* &/or appreciated value of an income property.
Total asset value
650 × 12 = 7800
I like to take 30 percent off to calculate a conservative net( for closing costs, management, taxes,insurance & maintenance)
7800x.70 = $5460
Next...
Still crazy high. Anything in double digits is highly attractive. Now...
5460/16500 = 33% Cap Rate
Crazy high.