Investing Term of the Week: Cap Rate

The capitalization rate, or cap rate, is a metric used in commercial real estate to evaluate the potential return on an investment property. It is calculated by dividing the property's net operating income (NOI) by its current market value or purchase price. The cap rate provides investors with an estimate of the expected rate of return, helping them compare different investment opportunities. For example, if a commercial property generates an annual NOI of $100,000 and is valued at $1,000,000, the cap rate would be 10% ($100,000 / $1,000,000). A higher cap rate typically indicates a higher risk and potentially higher return, while a lower cap rate suggests a more stable, lower-risk investment.

What Nolan is Reading:

The Art of the Deal by Donald Trump

Regardless of political views, Donald Trump’s The Art of the Deal provides valuable insight into the power perseverance. A lot can be learned about what it takes to be successful in the unforgiving world of real estate investing.

- Donald Trump outlines his business philosophy, emphasizing the importance of thinking big and taking calculated risks to achieve success.

- He highlights the significance of negotiation skills, sharing personal anecdotes and strategies for making deals that benefit all parties involved.

- Trump stresses the value of persistence and resilience, encouraging readers to learn from failures and continue pushing forward.

- The book provides insights into Trump's daily routine and decision-making process, showcasing his hands-on approach to managing his business empire.

- Trump discusses the importance of building a strong brand and reputation, suggesting that these are crucial assets in any business venture.

Nolan’s TikTok Updates:

@industrialre_investor

My Investment Flaw: Shiny Object Syndrome #Realestate #realestateinvesting #cashflow #depreciation #costsegregationstudy #costsegregation... See more