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HOW DO I DETERMINE THE VALUE OF COMMERCIAL REAL ESTATE? HERE IS HOW...
Commercial Real Estate has Financial Indicators that are generally used in determining the value of Real Estate… “What Is It Worth”
Financial Indicators:
SUMMARY OF CALCULATIONS 
Price Per SqFt: Price ÷ SqFt 
Price Per Apartment Unit: Price ÷ # of Units 
Gross Rent Multiplier: Price ÷ Gross Potential Income (GPI) 
Vacancy Per Apt. Unit: GPI X % Vacant 
Economic Vacancy: Actual $ Value of Vacancy ÷ GPI 
Expenses Per SqFt: Total Expense ÷ Total SqFt 
Expenses Per Unit: Total Expense ÷ Total # of Units 
Expenses As % of GPI: Total Expense ÷ GPI 
Cap Rate: NOI ÷ Price 
Cash On Cash Return: Cash Flow ÷ Cash Invested 
GEI Return: GEI ÷ Cash Invested 
Loan To Value Ratio: Loan ÷ Price 
Taxable Income: GEI - Depreciation 
Theses indicators are based on income and expenses here is a easy to use worksheet:
(every property experiences income & expenses) 
 
Gross Potential Income (GPI) $____________________________ 
Plus Other Income + $____________________________ 
Less Vacancy or Credit Allowance ( % ) - $____________________________ 
Gross Operating Income (GOI) = $____________________________ 
Less Expenses - $____________________________ 
Net Operating Income (NOI) = $____________________________ 
Less Debt Service - $____________________________ 
Cash Flow Spendable = $____________________________ 
Plus Loan Principal Payments +$____________________________ 
Gross Equity ... more

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