Real Estate Agent · Las Vegas, NV · Member since 2017 · 279 posts · 133 votes
7y
There are quite a few on the MLS and I run the numbers on them pretty often. Most have a CAP rate of 4-7% and the asking prices are well over FMV. I found one recently that has some potential. I haven't made this math public yet so you're the first to get it but this is one of the better ones I've seen lately and I run the numbers on quite a few properties each week.
There are quite a few on the MLS and I run the numbers on them pretty often. Most have a CAP rate of 4-7% and the asking prices are well over FMV. I found one recently that has some potential. I haven't made this math public yet so you're the first to get it but this is one of the better ones I've seen lately and I run the numbers on quite a few properties each week.
Cash, unimproved, at list, stated income:
Cashflow - $1,849
COC - 6.59%
CAP - 6.62%
NOI - 22,193
GRM - 11.63
Years to break even - 15.1
Cash, unimproved, FMV, stated income:
Cashflow - $1,849
COC - 7.01%
CAP - 7.05%
NOI - 22,193
GRM - 10.94
Years to break even - 14.2
Cash, unimproved, at list, projected income:
Cashflow - $2,189
COC - 7.81%
CAP - 7.84%
NOI - 26,273
GRM - 10
Years to break even - 12.8
Cash, unimproved, FMV, projected income:
Cashflow - $2,189
COC - 8.3%
CAP - 8.34%
NOI - 26,273
GRM - 9.38
Years to break even - 12
Thank you for the elaborate break down of some 4 plexes in this market here. One thing i noticed, isnt GRM and years to break even the same metric?
Gross Rent Multiplier (GRM) is the ratio of the price of a real estate investment to its monthly rental income before accounting for expenses such as property taxes, insurance, and utilities; GRM is the number of years the property would take to pay for itself in gross received rent.
But excellent calculations and breakdown Brad much appreciated!!!
Real Estate Agent · Las Vegas, NV · Member since 2017 · 279 posts · 133 votes
7y
Hey Mike! GRM is calculated by using the entire amount of rent towards paying back the initial cost of investment but that's not how it works in real life because there are other expenses like HOA, insurance, landscaping, etc. which is not accounted for in the GRM. The years to break even number that I am using is including all of those costs by dividing the purchase price by the yearly NOI.