My CRE Notes Flashcards
1
Q
define Cap Rate
A
Capitalization Rate. NOI/$=%
Income/Price=rate%
2
Q
rate is always a ___
A
%
3
Q
how do you get NOI
A
Gross Income - Operating expenses
Revenue-Expenses=NOI
4
Q
derived cap rate
A
the income approach, is usually given the most weight. That method is also known as the “band of investment” method of estimating the present value of future cash flows. It addresses the return required on both equity and debt, and leads to what can be called a derived capitalization rate.
Read more: http://www.creonline.com/cap-rate-formula.html#ixzz4kqZaeAHr
5
Q
cap rate triangle
A
N
\_\_\_\_\_\_
$ | %
N/price|rate
$*%=NOI
NOI/$=Rate
NOI/%=Price
6
Q
AGI
A
Adjusted gross income
