CAP Rate provides a measure of ability for an income property to return an initial investment. CAP Rate is calculated by dividing the NOI (Net Operating Income) by the Value (Or Sales Price). The lower percentage CAP rates like 6% to 8% are usually assigned to lower risk investments with long term lease agreements and have solid real estate measures, such as a Wal-Greens on a corner with a traffic light. Higher CAP rates are generally higher risk investments that require more management such as small apartment buildings not on a major road.
Category: Thought of the Day
Brian’s Thought of the Day
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Twitter for Real Estate Agents – Keep it Real
Twitter? Really? I am a busy (49 year old) real estate agent who happens to not need “yet another thing” to complicate my life. Twitter seems to be a plaything for kids. Yes, and kids are buying and selling real estate. Soo, old timer suck it up and represent yourself on Twitter because it is worth paying attention to. 500 million people are registered users. Twitter is not only a good place to communicate to your buyers and sellers but also other pros and business partners. Twitter is also a great marketing link tool to other social media and email marketing. Read the book “Crush It” by Gary Vaynerchuk. In it he tells the story of him turning his Father’s liquor store into a $60 Million business online using Twitter. He did it by listening to people on Twitter. Isn’t that where good customer service starts? Listening to your customers. Old school works with new tools. Time to learn real estate agent!
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How to use Twitter to find buyers and sellers of real estate
You can use Twitter to find future buyers and sellers of real estate. I did and I show you in less than 60 seconds what to type in Twitter’s search engine to find yours. The power of Twitter is not in “traditional” push marketing messages or information. The power lies in relationship! Real estate agents have practiced relationship building for years. The first thing in establishing a decent relationship with anyone is listening! This video shows you how to put your first Twitter “ears on.” Got your “ears on” good buddy? Hope so, because more good real estate agents are starting to listen.
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Boundaries Book is Great Resource for Sales People for Business
Boundaries: When to Say YES, When to Say NO, To Take Control of Your Life is a wonderful book full of stories that help you understand what is going on under the hood with your relationships. Dr. Henry Cloud and Dr. John Townsend put together practical solutions in story form that show you how to better manage your life and business, all the while having more peace and less stress. I highly recommend this book.
Boundaries: When to Say YES, When to Say NO, To Take Control of Your Life
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How to bring income security to sporadic commission earnings
How can you find security in a topsy turvy commission earnings business? Spend some time building a residual based income stream for future peace of mind.
The best business I had the privilege to own was shares in a home owner’s insurance company. The initial investment was less than $7,000 and in less than 5-6 years it paid out over $95,000 because I sold my shares over a 5 year payout. There are many types of businesses that pay money over time and are not tied to constant prospecting and 100% commission. These are great supplements to the real estate agency business because there is nothing residual about real estate commission with the exception of commercial lease payouts that may come over time. The three I touch on in this video are 1. Rental income, 2. Home Owner’s Insurance, 3. and Legal Shield business. Find your residual income source today and start working it.
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You are a commercial tenant then you want a GROSS lease!
If you are a commercial tenant then you want to enter into a Gross lease. A gross lease has the landlord pay all expenses, utilities, taxes, cleaning, etc. from the rent payments. A triple net lease places much of the burden of expenses including property taxes onto the tenant instead of the landlord. Many small commercial tenants and landlords enter into “modified gross” leases which split some of the costs between them.
Before you enter into any type of lease agreement seek counsel from your Realtor and attorney.
