One of my mentors, Russell Gray, frequently says “Do the math and the math will tell you what to do!”  That’s exactly what this blog post is going to help you do.  In fact, you’re going to learn that fast and easy way for you to get started so that you are stuck by the famous paralysis-analysis syndrome.  By the time you’re finished with the quick post you’ll feel more comfortable and confident with how to get started in calculating your real estate numbers.

With all of this extra time on your hands you’re interested in finding a way to cut through all of the noise and get what you need quickly…I’m going to make this very easy for you to get started so that you can have more control over how you move forward.  Having a strong foundational knowledge will help you to have a safe, repeatable way to build it.  It’s like learning a new language so once you learn the basic structure you can start to build more complex constructions.

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The good news for you is that you can apply this simple calculation to a single family house, an apartment complex, storage facility or even a large industrial building.  So let’s get you started with figuring out how to calculate real estate numbers easily. 

First things first!  You need to know all of the different ways that your real estate is going to create revenue.  This will include things like rent and additional services.  In order to create revenue you probably already recognize that you have different people, processes and tools to help you to generate the revenue.  These and many more items are referred to as your operating expenses. 

When you take your initial revenue minus the numerous operating expenses you have your Net Operating Income (NOI).

Provided that you have all of the money you need to purchase your real estate then you can pretty much stop here.  If you’re like the majority of us you’re probably looking to use leverage (think mortgage or OPM).  If so, then you’ll need to subtract your Debt Service  from the NOI to get you to your Cash After Debt Service (CADS) or Net Income.  

This is the money that you can put into your pocket and use to invest further in your business or look to purchase more assets.

Now that you know the basic foundation of how to calculate your real estate numbers easily now it’s time to take action.  Go out and find some properties that fit your personal investment philosophy and work your way through the numbers.  

If it’s your first time here, I’m going to ask that you please subscribe to the blog, subscribe to our YouTube Channel, like our Facebook FanPage and follow us on our Instagram and Twitter channels. Make sure you listen to The Going Long Podcast where every week you’ll hear me interview the best experts in the real asset investing world.

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If you’d like to learn more about how I work a corporate job and have been building my own real estate business on the side, you can simply click HERE for your free eBook. It’ll help you avoid making the same mistakes I did.

That’s my two cents for today. As always, hasta la próxima.

You can also check out my latest podcasts and collaborations here keeponcashflow.com/podcasts/