Top Multi-Family Real Estate Investment Mistakes To Avoid
The average annual income for real estate investors in the U.S is $123,937. Does that sound enticing? Before making committing to your first investment property there are a few bumps in the road you should know and certainly avoid.
Only Using Comparables When Buying Properties
For multi-family dwellings, AVOID using just comparable properties in the area when purchasing. INSTEAD base purchase off prospective income.
Comparable values will tell you the value of your property when purchased, not how much you will make.
Not Understand Your Cash Flow Figures- The 3 Essential Ratios of Investing
Capitalization Rate
Cap Rate is equal to your net operating income divided by current market value (property sales price)
Net Income From Rental Properties= Rent payment from renters (-) mortgage/insurance/expenses
Your Capitalization rate will show the potential rate of return on your investment.
Source: https://www.davidlindahl.consulting
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