TUTORIAL: ARTICLES

The following articles have been written to help you understand the nuances of real estate investing. Feel free to share.

Formulations

  • Break-Even Ratio (BER)
    The ratio often used by lenders when trying to decide whether or not to underwrite an investment property loan...
  • Capitalization Rate
    The popular return used by analysts to measure an asset's financial performance and make similar-type property value comparisons...
  • Cash Flow
    A fundamental look at real estate investment property cash flow for those of you new to real estate investing...
  • Cash-on-Cash Return (CoC)
    Cash-on-Cash, the popular real estate investing return, is explained including its meaning, shortcoming, and formulation...
  • Debt Coverage Ratio (DCR)
    Debt coverage ratio (DCR) is explained for those engaged in real estate investing who might not understand its purpose and formulation...
  • Gross Rent Multiplier (GRM)
    A quick and easy way to determine whether or not a property is priced in line with other similar-type properties...
  • Internal Rate of Return (IRR)
    The time value computation that shows the ratio between future cash flows and initial cash investment as a percentage...
  • IRR, MIRR, FMRR
    The formulations for internal rate of return, modified internal rate of return, and financial management rate of return are explained...
  • Loan-to-Value (LTV) Ratio
    A computation related to mortgages that lenders use when financing investment property as a measurement of their financial risk...
  • Maximum Purchase Price
    A calculation investors can make to determine the maximum price they can pay for an income property to at least break-even and avoid a negative cash flow...
  • Net Present Value (NPV)
    Net present value is explained along with its formulation and use in real estate investing...
  • Payback Ratio
    The benefit of calculating the payback ratio during a real estate analysis is explained with formula...
  • Profitability Index
    The time value computation that shows the 'proportion' of dollars returned to dollars invested rather than the amount...
  • Sinking Fund Factor
    Know the amount you you must start setting aside on a regular basis now to cover a capital expenditure scheduled in the future...

Tax Matters

  • Annual Depreciation Allowance
    How to figure the annual depreciation allowance the IRS permits real estate investors to write off as a tax deduction for their residential and commercial investment real estate properties...
  • Recapture Tax
    A look at the depreciation recapture tax real estate investors might owe the IRS when they sell their income property...

Analysis

  • Financial Leverage
    Financial leverage explained and how it can impact a real estate investor's returns and profitability...
  • Scenario Analysis
    The scenario analysis is explained so you know how to use it to benefit your next investment real estate evaluation...
  • Sensitivity Analysis
    Changing one variable at a time over a possible range of outcomes in order to evaluate the effect of that change...

Reports

  • The APOD
    Discover why the APOD is used by real estate investors to examine the annual property operating data of potential real estate investment properties... or watch the video.
  • The Proforma Income Statement
    How a proforma income statement is created to project rental property revenues and expenses that real estate investors use to forecast and evaluate its financial performance over time...

General

Software Specific