Aug 03, 2010 18:02
Potential Client: I want to list this building for $395,000.00
Me: Well we need to take a look at the numbers. If your cap rate doesn't come out over 8% no investor will look at it.
Potential client: Oh, that's not problem, we took in over 45,000 in rent last year.
Me: Yes, but we need to calculate your NOI (net operating income) for the cap rate.
*looks at numbers* at $395,000.00 cap rate = 4%. FML...