Lesson 7 – The Math, Pt. 2

The Math, Pt. 2 – How to calculate the numbers

Now it’s time to assess the expenses and get as close as you can to the actual numbers. Putting rough numbers on paper helps you come up with a clearer picture of what your offer should look like. I’ll walk you through calculating the expenses, NOI, capitalization rate, and loan payment and profit.

Lesson 6 – The Math, Pt. 1

The Math, Part 1 – How to calculate the numbers

In a good Deal, the numbers work. Most new investors decide if a property is a good deal based solely on the pro forma. While the pro forma is a good starting guide, you should always trust, but verify. This is one of the most important parts of the whole process; it is only a good deal if the actual numbers maintain cashflow. You should not be feeding a property money every month hoping rent will increase. Get ready for some math!