Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
@LucasBenjamin7H
22 күн бұрын
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
@StevenDonald2
22 күн бұрын
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
@EdwardAnthony5
22 күн бұрын
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
@StevenDonald2
22 күн бұрын
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
@EdwardAnthony5
22 күн бұрын
Just ran an online search on her name and came across her websiite; pretty well educated. thank you for sharing.
@BUILDYBUNCH
7 ай бұрын
Thanks a lot for breaking down the CAP RATE and NOI - your explanation made it so much easier to grasp. Appreciate the clarity!
@SageRealEstate
7 ай бұрын
You're very welcome!
@qaiserqureshi4024
4 ай бұрын
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
4 ай бұрын
Glad you liked it! Thanks for commenting.
@MarkD11
7 ай бұрын
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
7 ай бұрын
Glad it was helpful!
@theplinkerslodge6361
11 ай бұрын
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.
@cheliospanama9786
Ай бұрын
Thank you for the explanation 😃
@SageRealEstate
28 күн бұрын
Thank you for following us
@patomlinson4865
Жыл бұрын
Great. Teacher Or mentor Is a man who can touch your mind nice details scenario.
@SageRealEstate
Жыл бұрын
Yes, you are right
@adrian.o4495
Жыл бұрын
Your videos deserve a lot more views I think they will grow in the near future
@diane8784
Жыл бұрын
I think so too! This video clearly explains cap rate and NOI for me, thank you👍
@simangafoster4504
8 ай бұрын
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
8 ай бұрын
You are correct. ✅
@julianbernilla1177
Жыл бұрын
It is excellent information !! GOD Bless you🙏🙏🙏🙏
@SageRealEstate
Жыл бұрын
So nice of you
@maddenmaddad
18 күн бұрын
Great explanation, my only question is how do you determine the taxes on the new purchase price
@SageRealEstate
17 күн бұрын
In California taxes should be 1.25% of purchase price.
@Dedi-c8b
Жыл бұрын
Thx for using the white board to explain things, much appreciated!👍
@SageRealEstate
Жыл бұрын
Thanks Diane. We plan to use the whiteboard more. Comments like this reassure us.
@bryan35801
Жыл бұрын
Excellent video, enjoyed the easy explanations and TRIMUP
@SageRealEstate
Жыл бұрын
Glad you enjoyed it! Thanks for commenting !
@LesterWilliams-n6p
Жыл бұрын
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
Жыл бұрын
Awesome, thank you!
@YepLeon
8 ай бұрын
I have a duplex for sale
@TreFree-n7o
11 ай бұрын
Thanks for this video. Very informative
@Ace-ht1is
Жыл бұрын
Thank you for the explanation but it sounds quite unrealistic in Southern California. Because properties are overpriced out there. It's almost impossible.
@Psalms20A21
23 күн бұрын
🧠Thank You, enjoyable to learn! Teaching style was explained well. New to the channel. Will checkout other videos. Will share
@SageRealEstate
22 күн бұрын
Thanks and welcome
@MacRobn
2 ай бұрын
Very well put together vid!
@SageRealEstate
2 ай бұрын
Thank you
@LuisVargas-ji6yk
8 ай бұрын
Good explanation, thank you!
@SageRealEstate
8 ай бұрын
Thank you, Luis make sure to like, comment and subscribe. Your feedback let us know the type of content to create.
@rlew8095
5 ай бұрын
Great video! Thank you!
@SageRealEstate
5 ай бұрын
Thanks 🙏
@Walina-gv9ph
Жыл бұрын
How are you comparing properties on the market?
@SageRealEstate
Жыл бұрын
We are looking at both closed sales and active sales to get an accurate view of where cap rates are at.
@Walina-gv9ph
Жыл 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
@alejandrosantos1879
10 ай бұрын
Great video man
@RaceForGoodLife
9 ай бұрын
great info my friend! thank you
@SageRealEstate
8 ай бұрын
Glad it was helpful!
@RexiRexx87
3 ай бұрын
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
3 ай бұрын
If you're trying to refinance, the lender should use your income in and expenses for your property.
@Fernando_Belmont
5 ай бұрын
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
5 ай бұрын
If you increase rents, the expenses will remain the same. Yes.
@CoachMeMLD
Жыл бұрын
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
Жыл бұрын
Net operating income divided by sales price.
@mauriciocruz5271
Жыл бұрын
Great info , I am subscribed. Will look up your office
@SageRealEstate
Жыл бұрын
Welcome aboard!
@roopeshkrishnamoorthy4800
Ай бұрын
Awesome video! Just had a quick question in minute 15:50 when you were explaining about the final increase in equity value of $56.000. Based on the math the total price of the property would increase which we know, however wouldn't that decrease the cap rate then(cap rate: NOI / total value)? Or would the NOI also change(perhaps increase?) because of the rehab done on the property? Sorry if this seems to be a very obvious answer lol
@parulsood3636
10 күн бұрын
Cap rate will be calculated like a future ROI on an Initial investment. Means its calculated on the Purchase price throughout, and not the increased value of an asset. Hope that helps!
@ramsrini-nb8yf
Жыл бұрын
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.
@TwinPalmsOn30A
9 ай бұрын
For the same reason mortgage isn’t included in operational expenses, management fees shouldn’t either
@SajidArt1
Жыл бұрын
beautiful explanation .......grt
@SageRealEstate
Жыл бұрын
Thanks for liking
@Ronnie-d3s
6 ай бұрын
Your awesome Thank you
@SageRealEstate
6 ай бұрын
You are so welcome
@tracychen36
Жыл бұрын
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
Жыл 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.
@user-kl7cp6gh9s
Жыл бұрын
Is it bad idea to buy 1bed1bath 4unit? Please advice. Thanks :)
@SageRealEstate
Жыл бұрын
I don't believe it's a bad idea. Nothing wrong with all one-bedrooms or all studios in a four Plex.
@gabriellecarmen9869
Жыл бұрын
Great video. How does the mortgage cost fit into valuation and cap rate? You specifically leave it out for NOI..
@Walina-gv9ph
Жыл бұрын
Debt service is on an operating expense. Cap rates are used to value NOI. NOI is income less operating expenses.
@ranbirgill4718
7 ай бұрын
This is so elementary why not teach us to add
@SageRealEstate
7 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.
@thejohnnaccarato
2 ай бұрын
great explanation. thank you!
@SageRealEstate
2 ай бұрын
Glad it was helpful!
@jmilly715
6 ай бұрын
Wonderful explanation! Not just calculations but concepts!
@SageRealEstate
6 ай бұрын
Glad you enjoyed the video. Let me know if I can explain another real estate calculation.
@NiaKora-k9e
3 күн бұрын
The only thing im not understanding is the "value" number - with the example of $770,000 , is that the number that you'd want to sell it for ? Meaning if you want to exit at that cap rate you must sell for the value number or better? Im not getting the significance of that snapshot value number
@mervilan1
6 күн бұрын
Taxes means the yearly property taxes, not the taxes when you buy the property. Also include the vacancy rates in the deduction from the gross income.
@akobim3977
11 ай бұрын
Very good. Clear explanations. I thank you
@AJF66OG
8 ай бұрын
Higher cap rates are usually considered a riskier investment and a little lower is more stable.
@SageRealEstate
8 ай бұрын
Correct riskier investments will typically have a higher cap rate.
@Malliomadeit
10 ай бұрын
💪🏽💪🏽💰🔥🔥
@Kirmo13
3 ай бұрын
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
3 ай бұрын
Hello, thank you for commenting. Can you please ask your question again? I'm not certain that I understand it.
@Kirmo13
3 ай 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.
@fatjonseatingadventures5429
6 ай бұрын
You spelt management incorrect
@SageRealEstate
6 ай бұрын
😂
@marcohoudini
Жыл бұрын
This is gold
@SageRealEstate
Жыл бұрын
Thank you 🙏
@llambproduxions
7 ай бұрын
Would it make sense to Capex a solar panel installation for an apartment complex and resell the electricity to each tenant?
@shouldigetit
Жыл бұрын
Great explanation, thank you!
@Nilla-_-Jouz
28 күн бұрын
that calc aint workn
@SageRealEstate
12 күн бұрын
Are you saying that the Calculator is not working on our website? If that's the case, we'll take a look.
@kennethmartin7138
Жыл бұрын
Great video!! Thanks 💯
@SageRealEstate
Жыл бұрын
Glad you liked it!
@rickmayorga5316
Жыл бұрын
The best video I’ve come across! Thank you!
@SageRealEstate
Жыл бұрын
Thanks Rick !!
@jfevrier9593
5 ай бұрын
Agree
@lonniewatson7779
Жыл бұрын
Does the same formula apply when wholesaling apartments?
@joser6703
3 ай бұрын
Excellent video...How would you calculate the value if the building is NOT occupied...As in Vacant?
@SageRealEstate
3 ай 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.
@rafaeldominguez5372
Жыл бұрын
What are the other 5 metrics.?
@ivans2635
3 ай бұрын
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
3 ай бұрын
Reach out to us. You are our neighbor.
@roadto5million248
Жыл бұрын
Excellent video as always. When I choose to invest in California I'll certainly be contacting you!
@SageRealEstate
Жыл бұрын
You got it !
@diane8784
Жыл бұрын
I'll be investing in Michigan initially & then out of state investing eventually... Multifamily.
@SageRealEstate
Жыл бұрын
Excellent
@datboinate0192
2 ай бұрын
I’ve learned more in 5 mins than most guys in a hour.
@SageRealEstate
2 ай бұрын
Thank you we have a new cap rate video coming out in the next two weeks. I hope it's as good as this one. ☝️
@shakeelbaig359
28 күн бұрын
Great way of explanation, thank you!!!
@SageRealEstate
22 күн бұрын
You are welcome!
@georgestreng
Ай бұрын
Very well explained. Thank you!
@SageRealEstate
28 күн бұрын
Glad it was helpful! I appreciate you tuning in.
@jessicahou8340
7 ай бұрын
Thanks for sharing this knowledge ❤❤❤
@SageRealEstate
7 ай бұрын
So nice of you
@JustinPumpr
Жыл бұрын
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.
@Walina-gv9ph
Жыл бұрын
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?
@lindor-1luv402
7 ай бұрын
Greaty explained!
@SageRealEstate
7 ай бұрын
Glad it was helpful!
@paulbiniasz2278
6 ай бұрын
Great Job!
@SageRealEstate
5 ай бұрын
Thank you! Cheers!
@edithwaithira9967
Жыл бұрын
Thank you for making it easy to understand!
@SageRealEstate
Жыл бұрын
Thanks Edith
@tiggerpup_nz
8 ай бұрын
“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
8 ай бұрын
Correct. Cap rate is really only one way to measure performance, and there's always additional factors in determining a good deal.
@Markell2
Жыл бұрын
Valuable content can't wait to buy my first property!
@SageRealEstate
Жыл бұрын
Thank you
@Rose-re9tn
Жыл бұрын
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.
@ladybug19348
Жыл бұрын
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.
@RobertZ-c9k
Жыл бұрын
Great video, simple explanation, unlike some investors who click bait people. Thanks and keep up the great work!
@SageRealEstate
Жыл бұрын
Appreciate it!
@Freedomridingcompany
10 ай бұрын
Great video. I generally have been dealing with commercial buildings strip centers with 6-8 stores. Thank you.
@SageRealEstate
10 ай бұрын
Congratulations on your success. What's the going cap rate for those types of strip centers that you invest in?
@Freedomridingcompany
10 ай бұрын
The Cap Rates run 7.09 and 8.80 in the two different areas.@@SageRealEstate
@josemendez498
4 ай бұрын
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
4 ай бұрын
Hello Jose, Visit my website www.sageregroup.com All my info is there. Thanks
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