Considering Multi-Family for Investing? New app to help…
July 8, 2019
While our business is primarily focused on how we can buy and renovate properties to redevelop them into homes for new buyers or hold them as rental properties – we are also advocates for other investors. But not all investors are long-term players. Many are just getting into the business with the purchase of a duplex or maybe a three-unit multi-family.
Evaluating those deals isn’t hard, but it’s not easy. Especially if it’s not your ‘day job’. There is a mountain of software or excel spreadsheets littering the Internet that you can use. There is a new app coming out that looks promising. It focuses on the primary / initial indicator when evaluating a rental property. Cap Rate. Simply put the Cap Rate is the % that is related to the Net Operating Income (NOI) divided by the purchase price. For example, if you buy a property for $100,000 and it has an annual Gross Operating Income of $10,000 (before expenses, but excluding the debt service) with a Net Operating Income of $5,000 – the CapRate is 5%. $5000 divided by $100,000 is 5%. Now, is that a good percentage? Well, depends on what market you are looking to invest in. That might be average or well below average.
TapCap for Investor Clients looking at Multi-Family Lending
https://www.inman.com/2019/06/28/impress-investor-clients-with-tapcaps-multifamily-lending-app/
TapCap might be a good tool – take a read of the article and sign up for early access.
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