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Updated over 9 years ago on . Most recent reply

Monica Garguilo's profile image
Monica Garguilo's profile image
Monica Garguilo
  • Real Estate Agent
  • from Massapequa, NY
  • Member since Jun 4, 2015
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Monica Garguilo's profile image
Monica Garguilo's profile image
Monica Garguilo
  • Real Estate Agent
  • from Massapequa, NY
  • Member since Jun 4, 2015
Connect
Monica Garguilo
  • Real Estate Agent
  • Massapequa, NY
0
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6
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Buying & Selling Real Estate

Using mortgage pmt to determine cap rate

Monica Garguilo
  • Real Estate Agent
  • Massapequa, NY
Posted

Hi - can somebody please explain why the mortgage expense is removed from the NOI when calculating the Cap rate? A mortgage pmt is a monthly expense, so if you account for it when you determine your NOI, why is it removed when calculating the cap rate? What does the formula then become?

Thanks.....

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