Updated over 1 year ago on .
How to value a property without comps
I recently got back into adding more commercial real estate training content on my YouTube and TikTok and thought I would share as it might help someone moving into commercial real estate investing and/or brokerage.
Everyone talks about CAP rates and how they compare to other properties, but I rarely see people describing algebraically what CAP rates are made of from market driven metrics. Furthermore, how to you come up with a CAP rate valuation when you have no reliable comps? Believe it or not, there is a method to the madness, and it is by using the underrated and underutilized Band of Investment method. I use this many times to value commercial property that is even completely vacant! Another video to come on that one later!
The Band of Investments calculates the cost of debt and cost of equity on an asset that has been stabilized that is driven from market to market and economy to economy. I've put together a detailed video just for you! Hope you enjoy!