Real estate blog entries tagged with investment terms by Dan Miller (Keller Williams Realty, Madison, Wisconsin)

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Home : Blogs : Dan Miller : Dan Miller's Blog : Tag "investment terms"

investment terms: Cash-on-cash return defined - 05/28/10 07:21 AM

We've added a new entry to our list of multifamily investment terms at MadisonIncomeProperties.com. Today we cover how to measure the interest rate retun on invested equity.

Cash-on-cash return measures a property's interest rate return on invested equity (ie cash). Cash-on-cash return is determined by taking the ratio of the annual net cash flow to the invested equity (cash).
As an equation:
Cash-on-cash return = (annual net cash flow)/(invested equity)
Let's suppose an investor purchases a property for $550,000, putting 20% down in cash ($110,000). Also suppose the property cash flows $750 per month or $9,000 per year under this scenario.
Cash-on-cash return = … (0 comments)

investment terms: Capitalization rate defined - 05/26/10 06:54 AM

We continue to define important multifamily investment terms at MadisonIncomeProperties.com. Today we'll cover how to measure an investment's capitalization rate.
The capitalization rate (cap rate) measures a multifamily property's unleveraged (ie all cash) interest rate return. This measure is the ratio of net operating income to the purchase price of the property. In other words:
Cap rate = (net operating income)/(all cash purchase price)
For example, suppose an investor is considering a property priced at $550,000. The listing for this property states an annual net operating income of $55,000. In this case the cap rate is equal to 10%.
Cap rate … (5 comments)

investment terms: Multifamily investment term #1: net operating income - 11/29/09 09:17 AM

We've covered how the Dane County multifamily real estate market has changed, presenting investors with new opportunities that weren't available a few years ago. Due to this clear market shift, we've created a new web site, MadisonIncomeProperties.com, which we've designed to help Dane County investors with their multifamily real estate goals. We'll be adding more content to our site over the next several weeks, including a multifamily real estate search tool, so please check back often as we round out our site.
One of the tools we'll be adding soon is a glossary of investments terms, and we'll begin by covering these terms one-by-one in our … (3 comments)

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Dan Miller

Madison, WI

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Keller Williams Realty, Madison, Wisconsin

Address: 3 Point Place, Madison, WI, 53719

Office Phone: (608) 852-7071

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