One that is leased at current market rates. One that is in a good job market. One that after you add the income and subtract the expenses you have enough to pay the mortgage and then have something left over.

The revenue stream from income-producing real estate is determined by the terms of the lease agreement between the lessee and the lessor. It is that revenue minus the operating expenses that creates the net operating income (NOI) used to calculate the capitalization rate. It is this capitalization rate that ultimately becomes the key factor deciding […]

You’re not alone. Qualified Intermediaries all over the country are inviting real estate investors involved in or considering a 1031 exchange to put their funds into a TIC. They’re placing ads in the newspapers. They’re holding seminars. Why do the QIs have all this interest in TIC? Because they stand to make a lot of […]

NetGain’s National Income Property Index (NIPI™) uses a combination of the unemployment rate and the 30-year fixed annual percentage rate (APR) to recommend a capitalization rate (cap rate). National percentage rates are used. Currently, the interest rates are at 6.41% APR (for a 30-year fixed mortgage) with an unemployment rate of 4.5%. Those numbers should […]