Corporate Finance Learning® on LinkedIn: #realestate #realestatedubai #realestatefinance #projectmanagement (2024)

Interesting real estate investment evaluation!

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𝗡𝗲𝘃𝗲𝗿 𝗺𝗶𝘀𝘀 𝘁𝗼 𝗲𝘀𝘁𝗶𝗺𝗮𝘁𝗲 𝗿𝗲𝘁𝘂𝗿𝗻 𝗼𝗳 𝗿𝗲𝗮𝗹 𝗲𝘀𝘁𝗮𝘁𝗲 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁. 🏠This is simplified model for everybody to understand key concept of investment in property.🏢 What is included in this evaluation:𝗔𝘀𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻𝘀Assumptions used in model like:→ Year of investment→ Currency→ Expected annual appreciation growth in fair market value of property→ Discount rate→ Long term growth rate→ Corporate income tax𝗜𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 𝗶𝗻 𝗽𝗿𝗼𝗽𝗲𝗿𝘁𝘆Schedules of property price, brokerage fee, renovation and improvement and other investments𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗻𝗴→ Structure of financing→ Loans→ Own funds𝗜𝗻𝗰𝗼𝗺𝗲Schedule of all type of revenues in coming years𝗘𝘅𝗽𝗲𝗻𝘀𝗲𝘀Schedule of all type of expenses in coming years𝗗𝗶𝘀𝗰𝗼𝘂𝗻𝘁 𝗿𝗮𝘁𝗲Calculation cost of capital as appropriate discount rate foe project evaluation𝗘𝘃𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻Crucial sheet about outcome of project evaluation showing key parameters like net present value, payback period𝗜𝗥𝗥Showing expected annualized rate of return on a particular investment or project______________𝗗𝗢𝗪𝗡𝗟𝗢𝗔𝗗 𝗟𝗜𝗡𝗞: https://lnkd.in/dJ_EyQ_bThe model is given with minimal cost for limited time. 𝗢𝗥📌 Grab all 50+ finance models and 35 lessons in my 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗲 𝗠𝗼𝗱𝗲𝗹𝗶𝗻𝗴 𝗣𝗮𝗰𝗸𝗮𝗴𝗲 and start creating your financial health today :👉 https://lnkd.in/dZwwg6Wj_________________#realestate #realestatedubai #realestatefinance #projectmanagement

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Gross Rental Yield (GRR) is a financial metric used in real estate investment analysis. It calculates the return on investment generated by a property based on its rental income. 💲💲✖️➕➖➗🟰💲💲GRR is determined by dividing the property's annual rental income by its purchase price or market value, and multiplying the result by 100 to express it as a percentage. It helps investors assess the potential return on their investment and compare different properties. However, GRR does not account for expenses like taxes and maintenance costs, so it should be considered alongside other factors when evaluating real estate investments.

WHAT CAP, WHAT RATE? Cap rate is a financial measure used to compare income-producing properties/land. Cap rate (or capitalization rate) shows how much an investment returns (in one year) afteraccounting for operational expenses (cost required to maintain the property) and adding any other possible side-income (called other income) the property might be capable of generating besides the rental income, as compared to how much was paid for the property. That was a long statement, but not sure if there is a way to simplify it. Well, yes there is a way to simplify it using this formula:-), Cap Rate = Net Operating Income/Property value. Cap rate is always expressed as a percentage (%) value. Is cap rate the best way to evaluate a property? Cap rate offers a simplified approach to evaluate the property's financial performance over a 1 year period. While cap rate gives a simple snap-shot of an investment's 1-year return, it is not capable of measuring the total return over the typical 5 year investment period. There are other methods like internal rate of return (IRR) and Net Present Value (NPV) that are used to measure multi-year return on an investment.As an investor in commercial real estate, you should work with someone who understands and can perform a detailed financial analysis on a commercial real estate investment property.#commercialrealestate #realestate #cre #realtor #realestateagent #realestateinvesting #property #commercial #commercialproperty #realestateinvestor #business #investment #propertymanagement #investmentproperty #forsale #retail #entrepreneur #construction #officespace #realestatebroker #broker #multifamily #office #architecture #commercialrealestatebroker #investing#realestatelife#thehelpfulagent #themoreyouknow #icanhelp #investment #judgefite*You should consult your CPA for your tax or personal investment advise*

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🚫🏢 Attention Potential Investors! Why will I think twice Before Jumping into Off-the-Plan Investments! ⚠️🔍🔹 Market Fluctuations: Off-the-plan properties are susceptible to market fluctuations, and the promised benefits might not materialize when it's time to settle. 📉🏗️🔹 Construction Risks: Delays, quality issues, and changes to the final product are common risks associated with off-the-plan purchases. 🚧🔥🔹 Financing Challenges: Securing finance for off-the-plan investments can be more complex, with lenders imposing stricter criteria and valuations. 💼💰🔹 Limited Control: You have limited control over the design, finishes, and overall outcome of the property, which may not align with your preferences or investment goals. 🔍🏗️🔹 Oversupply Concerns: The market may become saturated with off-the-plan properties, leading to increased competition, lower rental yields, and potential difficulties in resale. 📈🏢🔹 Developer Reliability: Thoroughly research the developer's reputation, financial stability, and track record to ensure they can deliver on their promises. 💼🔒While off-the-plan investments have their perceived benefits, it's crucial to consider the potential risks and downsides before committing your hard-earned money.Ready for smarter investment opportunities? 🌟💼📞 Contact me today at 04 780 11016 for personalized financial advice and guidance on making sound investment decisions.📧 Email: ronald.gatbonton@hillsfinance.com.au#PotentialInvestors #OffThePlanInvestments #RiskAwareness #PropertyInvestment #ExpertAdvice

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Unlock the Path to Real Estate Investment Success Thorough market research, diversification 🌍, leveraging financing options, long-term appreciation 📈, active property management 🏢, tax planning 📝, and continuous education 📚 are the keys to thriving in real estate. 💼Here is the link to the full article- https://lnkd.in/drfy6Ea4.....#RealEstateInvestment #StrategiesForSuccess #MarketResearch #Diversification #LeverageFinancing #LongTermAppreciation #ActivePropertyManagement #TaxPlanning #ContinuousEducation #Networking #realestateexpert #realestateinvestment #realestateexperts #realestatebroker #realestate #realestateagent #realestateinvestor #realestatelife #realestatesales

Yield on Cost is the only metric you should be using to evaluate a real estate investment. Okay maybe not the ONLY metric, but it still provides a more accurate analysis than a Cap Rate.While Cap Rate is the ratio of Net Operating Income over Market Value (ie. Purchase Price), it completely negates the additional costs associated with a real estate transaction. How many times have you bought a property and spent additional dollars - above the purchase price - such as a renovation budget, closing costs, legal fees, etc?Every. Single. Time.These additional expenses are not included in the Cap Rate calculation, so why are you relying on Cap Rate to guide your decisions? Let me introduce you to YOC, or Yield on Cost.YOC accounts for everything that a Cap Rate does not.It is defined as a property’s Net Operating Income divided by TOTAL acquisition cost (Total Basis).It accounts for purchase price, capital expenditure budget, closing costs, acquisition & broker fees, third party reports, legal fees, the list goes on.YOC reflects the real money required to purchase a property and execute the business plan. This is why I will argue, Yield on Cost is a much better metric to use when analyzing real estate acquisitions and/or developments.Change my mind. #analytics #underwriting #multifamily #realestate #investments

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Educational Series:How to Assess and Mitigate Risks in Real Estate InvestmentsNavigating the real estate investment landscape requires a keen understanding of how to assess and mitigate risks effectively. Here’s a concise guide to help investors make informed decisions:Market Analysis: Understanding the local market dynamics is crucial. Consider factors like employment rates, population growth, and infrastructure developments to gauge potential demand.Property Evaluation: Conduct thorough due diligence on the property. This includes assessing the physical condition, legal status, and environmental risks. Hiring professionals for inspections can uncover issues that might not be apparent initially.Financial Analysis: Evaluate the financial viability by considering the property's income-generating potential, expenses, and cash flow. Use realistic projections and stress test your financial model for various scenarios.Diversification: Mitigate risk by diversifying your investment portfolio across different types of real estate assets and geographic locations. This can protect against market volatility in any single area or sector.Legal and Regulatory Compliance: Stay informed about zoning laws, building codes, and tax implications. Non-compliance can result in costly penalties and impact the investment’s profitability.Exit Strategy Planning: Have clear exit strategies in place before investing. Whether it's selling at a profit, leasing, or refinancing, knowing your options can help navigate market changes more effectively.Professional Advice: Collaborate with experienced real estate professionals, including agents, lawyers, and financial advisors. Their expertise can provide valuable insights and guidance.By taking a comprehensive approach to risk assessment and employing strategies to mitigate those risks, investors can position themselves for success in the real estate market.Disclaimer: This post is for informational purposes only. It is not intended as financial advice. Please consult with professional advisors for advice tailored to your situation.By Scott Stellmon#RealEstateInvesting #RiskManagement #MarketAnalysis #InvestmentStrategy #FinancialAnalysis #RealEstateTips #InvestmentAdvice #PropertyInvestment

Real estate can be a complex and dynamic field, but there are some foundational tips that can guide both new and seasoned investors. Here are three key tips to consider: 1. Understand the Market: Gain deep knowledge of the local real estate market, including trends, property values, and rental rates. Focus on one property type and recognize market cycles for better investment decisions.2. Financial Planning: Ensure sound financial planning, including budgeting, securing the right financing, and analyzing cash flow and return on investment. Prioritize investments with positive cash flow and potential for long-term value growth.3. Leverage Professional Networks: Build a network of real estate professionals and utilize expert services like agents, lawyers, and accountants. Stay informed and educated about market changes and new strategies.#BEMEGA #whoyougrowwithmatters #havefunmakemoney #offandon #experior #explife #megamentor #jessicaculpasyourresidentialrealtor #yourresidentialrealtor #jessicaculprealtor #TuesdayGrind #RealEstateHustle #RiseAndGrind #RealEstateAgent #KnowledgeIsPower #BuildingConnections #DigitalPresence #GoalGetters #SupportEachOther #SuccessMindset

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Real Estate Note Investing: Calculating Your YieldReal estate notes are a popular investment option. These notes represent a debt obligation secured by a property, and the investor receives payments from the borrower. But how do you calculate the yield on these notes?There are a few methods to calculate your note return, including the simple interest method and the compound interest method. The simple interest method calculates the yield based on the interest rate and the length of the note, while the compound interest method takes into account the compounding of interest over time.To calculate yield, you need to know the purchase price of the note, the interest rate, and the length of the note. Fortunately, Excel offers a simple formula to help you do just that.To calculate yield, use the following formula in Excel:= RATE (130, -646, 45,000)*12.The first number in the formula (130) represents the number of payments left on the note. The second number (-646) represents the monthly payment amount, and the third number (45,000) represents the current balance of the note.Calculating the yield on your real estate notes is important to determine the profitability of your investment. By using these methods and tools, you can make informed decisions about your investment strategy. However, it's important to note that this calculation does not consider servicing costs, which will be discussed in future posts.#RealEstateNoteInvesting #YieldCalculation #InvestmentStrategy #RealEstateInvesting #NoteInvesting #RealEstateNotes #Debexpert

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