Loretta A. Steele's (lasteele) Blog

Sensitivity Analysis plays an important part in the selling and buying decisions of multifamily or apartment transactions.  What is sensitivity analysis?  It is an analysis that involves changing one value to see how “sensitive” the results of an investment are affected by that change.  What woul...

How is the Net Operating Income or NOI calculated? Why is this income so important in rental property analysis? What to watch for when interpreting the NOI?  Rental property analysis is made up of various ratios, margins and value comparisons. One of the most important is the annual income from t...

Want a quick and easy estimate of the value of an apartment or multifamily property? A value you can easily solve using pencil and paper? A value that can tell you what other investors are paying for a property in relation to each dollar spent per Net Operating Income or NOI dollars. How about a ...

Why should you be concerned about the break-even ratio of an income producing property? If you know that the cash flow coming in meets or exceeds the cash flow going out, what else should you know? Ratios, percentages and math, are they really necessary? Which answer would you give; yes and no? ...

Any type of expense is something you pay for. If you paid for it, then is it an operating expense? Just because you paid for something is not necessarily an operating expense. An operating expense is an item that will ensure that the property will continue to produce income. Examples of these exp...

Cap Rate The Cap Rate or Capitalization Rate is term that is heard quite often in regards to income properties.  In this article the income property I will be referring to will be an apartment building. What is a Cap Rate? What is a good Cap Rate? How do you calculate a Cap Rate? And basically, w...

The Gross Rental Multiplier (GRM), Multiplier for short, is easy to calculate, but what value does it hold?  In the world of investment properties you will see it stated in advertising, pro forma statements, broker’s listings and online property sites.  The standard definition of a Multiplier is ...