"How to Buy Small Multifamily Properties!" (webinar)

3 Replies

Hey guys! I hope this post is not too annoying. I'm just starting out, still living in Sweden but will be moving soon to the U.S. Excited to start learning even more. Anyways, my questions are in regards to the subjects name of this post. Maybe some of you watched it? There are certain numbers on the report I don't understand how they are calculated. Even though the online calculators are a great tool I really want to understand the numbers I get, maybe someone can help me out? :) I took  some ss's and highlighted with red the numbers I have a hard time finding out how they are calculated based on the input numbers in the example Brandon gave during the webinar. Here are the pictures, let me know if they are too blurry: 

Thank you for your help in advance I really appreciate it! 

@Roberto Fernandez Andersson Welcome to the BP and congratulations on starting out!

In order to calculate the values you highlighted, do the following:

Purchase Cap Rate is calculated by dividing Net Operating Income (NOI) over the Purchase Price.

NOI Is calculated by subtracting all operating expenses from operating income.

Annual Expenses are projected for the property by multiplying (1) the actuals for the current year you obtain from the seller and (2) the project rate at which the expenses for the property will change year over year.

Property Value can be obtained from your realtor or can calculate it based on the comps for the area. 

Hi @Alina Trigub thank you for your reply it helped a lot! 

Just to follow up on a couple because they do make sense but the numbers don't add up for me :/ 

Annual Expenses: @ Year 1 = $18.718 * 1,02 = $19.032,36 in order to get Year 2. However, in the report it says $18.995? How is that possible with a 2% Y/Y growth?!

Total Profit if Sold: I just can't seem to get the numbers right! What's the exact formula?

Thanks again! 

Regards, 
Roberto