Randon James Morris | Understanding the real estate investing terms and formulas is extremely helpful for brokers, agents and investors who want to service or acquire real estate investment properties.

1. Real Estate
Investing Terms
And Formulas

2. About
According to Randon Morris Understanding the real estate
investing terms and formulas is extremely helpful for
brokers, agents and investors who want to service or
acquire real estate investment properties. This is not
always the case, though. During my experience as an
investment real estate specialist I often encountered far too
many that had no idea, and it showed both in their
performance and success rate.

3. Gross Scheduled Income
The annual rental
income a property
would generate if 100%
of all space were
rented and all rents
collected. GSI does not
regard vacancy or
credit losses.

4. Gross Operating Income
This is gross scheduled income
less vacancy and credit loss, plus
income derived from other sources
such as coin-operated laundry
facilities.
Gross Scheduled Income -
Vacancy and Credit Loss + Other
Income= Gross Operating Income

5. Operating Expenses
These include those costs
associated with keeping a
property operational and in
service such as property
taxes, insurance, utilities,
and routine maintenance.

6. Net Operating Income
NOI is one of the most
important calculations to any
real estate investment because
it represents the income stream
that subsequently determines
the property's market value that
is, the price a real estate
investor is willing to pay for that
income stream.

7. Cash Flow Before Tax
This is the number of dollars
a property generates in a
given year after all cash
outflows are subtracted from
cash inflows but in turn still
subject to the real estate
investor's income tax liability.

8. Gross Rent Multiplier
A simple method
used by analysts to
determine a rental
income property's
market value based
upon its gross
scheduled income.

9. Break Even Ratio
A ratio some lenders
calculate to gauge the
proportion between the
money going out to the
money coming so they can
estimate how vulnerable a
property is to defaulting on its
debt if rental income
declines.

10. Loan To Value
Loan Amount ÷ Lesser of Appraised Value or Selling Price
= Loan to Value

11. Contact us
https://www.stage32.com/randonjamesmorris
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