We are Losness Group, Investment Real Estate. We are specialists in Multi-family housing (apartments).
CAP rate- A rate of return used to derive an income stream based on all income and expenses of the property, with no consideration for debt service.. This term is a measuring stick as to how an income property will perform. The CAP rate differs significantly between 2-4 unit properties and 5+ unit buildings.
Net Operating Income (NOI) / Price.
GRM (gross rent multiplier)- A rate of return used to derive income stream based on all the income the property produces, with no consideration for expenses or debt service. This term is a measuring stick as to how an income property will perform. The GRM differs significantly between 2-4 unit properties and 5+ unit buildings.
Price / Scheduled Gross Income (SGI).
Debt Service– The periodic payments, usually principal and interest, made on a loan. Expresses annually.
NOI (net operating income)- Incomes from a property after operating expenses and vacancy have been deducted. Expressed annually.
Price x CAP.
Cash Flow– Refers to the amount a property makes after all expenses and the loan are paid off. Expressed annually.
NOI – Debt Service.
Principle Reduction– This refers to the amount of principal gained back in 1 year of loan payments. Expressed annually.
Principal Reduction = Debt Service – (Total loan amount x Interest rate).
Debt Coverage Ratio– This is a tool used by lending companies to ascertain the most amounts of loan dollars they will lend on a property.
NOI / Debt Service.
Cost per Unit– Price / number of units
Price per Square Foot– Price / square feet of property.
Scheduled Gross Income (SGI)– The amount of money an apartment produces in 1 year, before expenses and vacancy are applied.
Gross Income– SGI – Vacancy.
% of Return– The percentage relationship between earnings and the cost of an investment.
Cash Flow / Down Payment.
Price– NOI / CAP