Very good. Clear explanations. I thank you

Thanks for this video. Very informative

Great explanation, thank you!

Excellent video, enjoyed the easy explanations and TRIMUP

@SageRealEstate

11 ай бұрын

Glad you enjoyed it! Thanks for commenting !

Wonderful explanation! Not just calculations but concepts!

@SageRealEstate

3 ай бұрын

Glad you enjoyed the video. Let me know if I can explain another real estate calculation.

Great video man

The best video I’ve come across! Thank you!

@SageRealEstate

9 ай бұрын

Thanks Rick !!

@jfevrier9593

2 ай бұрын

Agree

Good explanation, thank you!

@SageRealEstate

5 ай бұрын

Thank you, Luis make sure to like, comment and subscribe. Your feedback let us know the type of content to create.

It is excellent information !! GOD Bless you🙏🙏🙏🙏

@SageRealEstate

10 ай бұрын

So nice of you

Great video!! Thanks 💯

@SageRealEstate

9 ай бұрын

Glad you liked it!

Thanks a lot for breaking down the CAP RATE and NOI - your explanation made it so much easier to grasp. Appreciate the clarity!

@SageRealEstate

4 ай бұрын

You're very welcome!

Thanks for sharing this knowledge ❤❤❤

@SageRealEstate

4 ай бұрын

So nice of you

Great video! Thank you!

@SageRealEstate

3 ай бұрын

Thanks 🙏

great info my friend! thank you

@SageRealEstate

6 ай бұрын

Glad it was helpful!

WOW!!! As an uninformed investor, I doubted how well off I was. This cleared everything up and now I feel empowered to continue investing. I can't thank you enough for this video.🎉

@SageRealEstate

4 ай бұрын

Glad it was helpful!

Thx for using the white board to explain things, much appreciated!👍

@SageRealEstate

9 ай бұрын

Thanks Diane. We plan to use the whiteboard more. Comments like this reassure us.

Great Job!

@SageRealEstate

3 ай бұрын

Thank you! Cheers!

Great. Teacher Or mentor Is a man who can touch your mind nice details scenario.

@SageRealEstate

11 ай бұрын

Yes, you are right

Greaty explained!

@SageRealEstate

4 ай бұрын

Glad it was helpful!

Great - It's not only the formula but its concept and limitation are presented outstandingly. Appreciate and thanks for making this wonderful educational video. Regards

@SageRealEstate

Ай бұрын

Glad you liked it! Thanks for commenting.

beautiful explanation .......grt

@SageRealEstate

9 ай бұрын

Thanks for liking

Thank you for making it easy to understand!

@SageRealEstate

Жыл бұрын

Thanks Edith

Great info , I am subscribed. Will look up your office

@SageRealEstate

Жыл бұрын

Welcome aboard!

This is gold

@SageRealEstate

11 ай бұрын

Thank you 🙏

Excellent video as always. When I choose to invest in California I'll certainly be contacting you!

@SageRealEstate

Жыл бұрын

You got it !

Valuable content can't wait to buy my first property!

@SageRealEstate

Жыл бұрын

Thank you

Wow your video is the best on the Internet. I have zero experience in real estate but I am looking to learn more about it. So far I can follow everything you are explaining. Thank you for sharing your knowledge.

Your awesome Thank you

@SageRealEstate

3 ай бұрын

You are so welcome

Great video, simple explanation, unlike some investors who click bait people. Thanks and keep up the great work!

@SageRealEstate

11 ай бұрын

Appreciate it!

I think it is also wise to compare your Net operating income with other comparable properties in the locality, reason being: many factors can influence a higher net operating income like the age of your property, systems (Heating & ventilation systems), and property management. Thank you for the lesson 🙏🏿🙏🏿🙏🏿

@SageRealEstate

5 ай бұрын

You are correct. ✅

Your videos deserve a lot more views I think they will grow in the near future

@diane8784

11 ай бұрын

I think so too! This video clearly explains cap rate and NOI for me, thank you👍

Love the video content! Great job explaining the material, which made it easy to grasp and understand. I am a newbie to real estate investing, I haven't acquired any investment properties at the time in my real estate career, but I am very excited and know that my success is inevitable, reason being is that I really love real estate and most of all I love numbers. I feel that I have awakened my purpose in life. God Bless!

@SageRealEstate

10 ай бұрын

Awesome, thank you!

@YepLeon

6 ай бұрын

I have a duplex for sale

Long term you're going to want to measure in inflation. Plan for block expenses - save for replacement of major items like repaving, boiler, roof, painting, etc.

Does the same formula apply when wholesaling apartments?

Excellent video...How would you calculate the value if the building is NOT occupied...As in Vacant?

@SageRealEstate

15 күн бұрын

If the property is vacant, then I'm gonna determine what the market rents would be for the rentals and use that to come up with a cap rate.

Would it make sense to Capex a solar panel installation for an apartment complex and resell the electricity to each tenant?

Great video. I generally have been dealing with commercial buildings strip centers with 6-8 stores. Thank you.

@SageRealEstate

7 ай бұрын

Congratulations on your success. What's the going cap rate for those types of strip centers that you invest in?

@Joe124100

7 ай бұрын

The Cap Rates run 7.09 and 8.80 in the two different areas.@@SageRealEstate

Thank you for the explanation but it sounds quite unrealistic in Southern California. Because properties are overpriced out there. It's almost impossible.

Teach me! I’m in Lakewood. My wife and I don’t want to buy our first home, we want to buy our first fourplex.

@SageRealEstate

26 күн бұрын

Reach out to us. You are our neighbor.

What's the formula for figuring out cap rate for a neighborhood? Do we add the most recent sales and then do we compare it to the purchase price of the new house?

@SageRealEstate

10 ай бұрын

Net operating income divided by sales price.

Higher cap rates are usually considered a riskier investment and a little lower is more stable.

@SageRealEstate

5 ай бұрын

Correct riskier investments will typically have a higher cap rate.

What are the other 5 metrics.?

Maybe I’m over thinking this a bit. But I’m still a little confused on how cap rates get applied. So let’s say I’m eying a deal that by my numbers and fancy excel spreadsheet calculations, has a 12% cap rate upon purchase. The MARKET cap rate is 8%. If I want to pull equity out through a refi…will the value be based on the market cap of 8% or will it be based on my actual accounting numbers after I’ve been in the deal for a year or two?

@SageRealEstate

15 күн бұрын

If you're trying to refinance, the lender should use your income in and expenses for your property.

I'll be investing in Michigan initially & then out of state investing eventually... Multifamily.

@SageRealEstate

10 ай бұрын

Excellent

I have a question, when you increase rents the expenses increase too? I thought they stayed the same. If anyone can explain that would be great thank you

@SageRealEstate

2 ай бұрын

If you increase rents, the expenses will remain the same. Yes.

If i invest in a daycare center and be the NNN landlord only and not participant i the daycare operation. The NOI here is the NOI of the daycare business or the landlord’s NOI (I.e. pretty much just rent amount) ?

@SageRealEstate

10 ай бұрын

That is correct. NNN means the tenants pays all the operational cost so it will not need to be subtracted from the annual gross rent.

💪🏽💪🏽💰🔥🔥

For the same reason mortgage isn’t included in operational expenses, management fees shouldn’t either

Is it bad idea to buy 1bed1bath 4unit? Please advice. Thanks :)

@SageRealEstate

11 ай бұрын

I don't believe it's a bad idea. Nothing wrong with all one-bedrooms or all studios in a four Plex.

There are no cap rate comps for 4plexes. They are valued by the more accurate sales comparison method.

@SageRealEstate

Жыл бұрын

There is always a cap rate. It could easily be determined as you know the sales price and the operating income.

@Walina-gv9ph

Жыл бұрын

@@SageRealEstate There is no reliable source for cap rate comps on properties less than 5 units. Without comps you can't use direct capitalization. But the question is why would you want to use an inferior valuation metric?

Great video. How does the mortgage cost fit into valuation and cap rate? You specifically leave it out for NOI..

@Walina-gv9ph

10 ай бұрын

Debt service is on an operating expense. Cap rates are used to value NOI. NOI is income less operating expenses.

Hard to find anything over 5% cap rates for 2 or 3 family homes near big cities these days. Prices still too high and rent recession is due to happen as employment is at peak in 2023

@SageRealEstate

Жыл бұрын

Prices are still high nationally. Try focusing less on the cap rate and compare the income versus the mortgage. Smaller apartment buildings typically don't give off a high cap rate.

How do you find the cap rate for a market?

@SageRealEstate

Жыл бұрын

To find the market cap. You would need to find similar properties around the property you're considering and calculate what the cap rate is in that area from those closed sales. Or ask someone who is a real estate broker and understands cap rates.

How are you comparing properties on the market?

@SageRealEstate

10 ай бұрын

We are looking at both closed sales and active sales to get an accurate view of where cap rates are at.

@Walina-gv9ph

10 ай бұрын

@@SageRealEstate So if you are in an 8 cap market then ALL comparable properties are at about an 8 cap. Again, what are you comparing, an 8 cap to an 8 cap? LOL

so in the last example could you extrapolate the conclusion that an improvement to the property that you pay out of pocket $56k is "break-even" only if you can increase monthly rent by $400 because of it?

@SageRealEstate

15 күн бұрын

Hello, thank you for commenting. Can you please ask your question again? I'm not certain that I understand it.

@Kirmo13

15 күн бұрын

@@SageRealEstate Of course! In the section of the video titled "How Increasing Rents Affects Value", you give an example where doing renovations to a property allows you to increase rent by $400 per month, and as a result the value of the house increased by $56,000 (assuming a fixed cap rate of 6%). My question relates to the costs of the renovation, and in particular to the returns on the renovation. Almost as if it was a separate investment. If the cost of the renovation that allowed the rent to increase to $400/pm were exactly $56,000, then would that mean that you have made a "zero-sum" operation? 0% return, break-even as I said in the first question. I don't know how to phrase it differently. The logic behind this is that if I need to pay $56k for a renovation that will increase the value of my property by exactly the same amount, then I don't think the renovation was worth the time, effort and risk, especially if the property had to be vacant during the renovation. If instead the renovation costs only $30k, then I have made a $26k profit from the renovation. But maybe I am wrong because the assumption that the value of the property went up by $56k is based on the formula that uses a cap rate of 6%. So in theory it means that if I were to invest $56k in the renovation, I would get a return of 56,000*0.06= $3360 (just as stated in your video) of NOI per year. In this case, the hypothetical renovation of $56k would have a positive return, and the lower the invested amount the higher the return. So which one is it? If I were to spend $56k to renovate a property, which in turn would allow me to increase rent by $400 per month, would I break-even with my investment or should I rather invest it in something else? (let's ignore financing because that would introduce leveraging effects) I hope the question makes sense. and since I've already typed all of this out, thank you so so much for the amazing FREE content your guys provide! If I lived anywhere near Los Angeles I would definitely get in contact for an operation because you guys are true professionals! I watched other of your videos and the thing that I like the most about you guys is the long-term support you provide to buyers, even after the operation was concluded. Having a trusted professional that has reliable contacts in the industry is invaluable.

The operating expenses typically include things like property taxes, insurance, maintenance and repairs, utilities, and any other expenses related to the operation and maintenance of the property. These expenses do not include mortgage payments or other financing costs, as those are considered separate from the property's operating income and expenses. While payroll or salaries for any employees are an expense associated with the operation of the property, they are usually not included in the calculation of NOI. However, if the property has an on-site manager or staff whose salaries are directly related to the operation of the property, those expenses may be included in the calculation of operating expenses for the property.

“There’s no reason why you’d purchase at a cap rate lower than market” well not necessarily. Perhaps that property is under rented. Perhaps that property has lower risk.

@SageRealEstate

6 ай бұрын

Correct. Cap rate is really only one way to measure performance, and there's always additional factors in determining a good deal.

You spelt management incorrect

@SageRealEstate

3 ай бұрын

😂

This is so elementary why not teach us to add

@SageRealEstate

4 ай бұрын

Thank you for watching. This is one of our most popular videos might be simple to you but to many folks this is the first time they've seen it.

🤓cool

@SageRealEstate

11 ай бұрын

Glad you enjoyed our video!

I recently encountered a multihome apartment building of 15 units do you have an email or phone number that i can reach out to you and look over the details of this deal

@SageRealEstate

Ай бұрын

Hello Jose, Visit my website www.sageregroup.com All my info is there. Thanks