How to Evaluate a Property in 30 Seconds or Less!

Today’s is a quick one - on purpose! Today I’m going to show you how I evaluate a property in less than 30 seconds!

THE 30 SECOND EVALUATION

AKA

HOW TO FIND THE CAP RATE

First, we need 2 things: asking price and monthly rental income.

Start your timers!

Go!

1. Multiply the monthly rental income by 12.

   That’s your annual income.

2. We have 3 options for step 2:

   1. If all the tenants pay all the utilities, multiply your annual income by 0.7.

   2. If the tenants pay some of the utilities, multiply the annual income by 0.6.

   3. If the tenants pay for no utilities, multiply the annual income by 0.5.
      That number is your NOI.

3. Divide your NOI by the asking price. That’s your cap rate!

And that is your 30 second evaluation!

Huzzah!