Archive for the 'Q&A' Category

07 Aug

How is NOI calculated with mixed-use income property?

The scenario: An income producing property grosses $60,000 per year, and half is derived from a retail sales store, the other half from an upstairs nightly rental. The retail store is under a lease and the two properties cannot be sold separately. The sales shop tenant pays the utilities; the nightly rental does not.
The solution: […]

31 Jul

How do you square local cap rates with national recommendations?

NetGain provides national cap rate recommendations via its Nation Income Property Index (NIPI). There are times when local markets exhibit numbers that exceed the recommended rate. The foundations for NIPI are predicated on avoiding negative spread, the economic outlook (using the Consumer Confidence Index), and the current unemployment rate. Those components are factored into a […]

30 Jul

Where does one find commercial property with a 20 percent return?

The scenario: A small group of partners has been assembled to buy and operate a retail strip mall. The lead investor is looking for a property that will generate 20% cash-on-cash earnings and does not want to go below 18%, but sellers’ prices seem unrealistic compared to the real NOI.
The reality: The two main characteristics […]

29 Jul

How does one find owner information for income property?

The most efficient approach for getting the names and information of income property owners is to identify where there are lists available. NetGain offers two suggestions.
(1) There are list companies that will search and design lists of names and addresses for you. NetGain doesn’t endorse vendors, but if you google “mail list companies” and “international […]