How To Build A Cash Flow Model For Your Real Estate Investment Property

How To Build A Cash Flow Model For Your Real Estate Investment Property

Need Help With Your Model? Call (312)612-1031

How To Build A Cash Flow Model For Your Real Estate Investment Property

Financial Model For Real Estate Investment

Financial Model For Real Estate Investment

Here is an overview of the factors you need to take a look at in order to project your potential return on an investment.

Even if you expect to manage the property yourself, it’s best to budget in an allowance for professional property management.

Second, it ensures that you are covered if for some unanticipated reason you need to turn the management over to a pro at some point in the future.

For example, if you can earn 5% by keeping your money in the bank, you’re going to want a lot more than 5% for taking on the risk and time investments required by a rental property!

To determine this, you’ll need to estimate the building’s assessed value as a percent of the total purchase price.

Bank fees – how many points do you expect to pay, and what closing fees do you expect to incur if you will putting a mortgage on the property?

Now that you’ve got all the numbers laid out in front of you, you ‘just’ need to build a financial model which will allow you to project cash flow throughout your ownership term, and then use time value of money calculations to create a present value of those flows.

If the result is negative, it’s a red flag– you need to take another look, because this may not be a good deal for you.

Call Us To Help You Build A Cash Flow Model For Your Property – (312)612-1031

 

Michael Linton
Linton Global Real Estate Investments
Real Estate Professional
South Atlantic Real Estate Group
Florida Real Estate Financial Modeling Expert with over 30 Years Experience
2422 South Atlantic Real Estate Group
Daytona Beach Shores,Florida
32118
US
Phone: (386)312-1031