Mar, 2025

Cap Rates Deep Dive

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Rob Rowsell answers a question from a caller about commercial real estate cap rates. Rob follows up with a deep dive on capitalization rates in the property investment industry. Watch and read along to learn everything you need to know in this cap rates deep dive!

Commercial Real Estate Cap Rates And Property Values Explained

Our caller Deon asked if a “6” cap rate was ideal before making an offer. Rob clarified that his initial example was based on a “6” rate. Really, Rob views that number as a starting rate when making a quick valuation, then you will want to dig deeper to see if you can do better. Depending on the situation, another rate could work better. Many factors, from the market to the broker, could affect what rate you want.

What formula do you use to determine a commercial property value?

Rob explains that this formula differs from the one we use for multifamily property values. In that situation, you compare recent sales near the dwelling you’re looking at. When looking at a commercial property, you can divide the Net Operating Income (NOI) by the Market Cap (Capitalization) Rate. You will then arrive at the value of the commercial property.

For example, you pay $1 million cash for a property. It brings in $100,000 in Net Operating Income. Therefore, you paid a “10” cap for that property. A more realistic scenario would be paying $1.7 million cash, bringing the cap rate to 5.8 – thus, Rob’s initial example rounded up to 6.

When you take the time to calculate realistic numbers, you will know whether or not a property is worth your time. Do your due diligence, because commercial investments can be risky business, even for seasoned pros!

Join Our Multifamily Investing Community Today

Do you own your own multifamily rental properties? If not, do you plan to do so one day? Then you should consider joining our online financial group, the ATL Inner Circle Community! Each month, investing pro Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not quite as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

Aug, 2024

Crowdfunding Real Estate Investment: Is It Right For You?

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There are many ways to fund your property investments, but one online method may work better for some than others. Crowdfunding Real Estate investments? Yep, that is a real financing technique, and many property investors have succeeded using it. Like any technique for raising capital, it will take a LOT of work. Likely, it will take even more work than many conventional funding efforts. However, if you have a vast network of supportive partners, friends, and family who are active online, this might be ideal for you! Bookmark this blog entry, because you will want to come back to it!

Crowdfunding Real Estate Investments? How Does That Work?

You probably have contributed to crowdfunding campaigns over the years. Remember your generous contribution to your nephew’s rock band’s Kickstarter in order to fund their debut album? How about the time you pitched in to help a friend across the country with their medical bills via GoFundMe? These one time donations end with a finite goal. While some platforms allow for beneficiaries to award perks to their contributors, you are mostly in it to help a friend. Any benefits you receive are strictly intrinsic. But we are talking about crowdfunding real estate investments here! How can a property investor get in on the action, while also rewarding those who contribute?

When Rob brought up this method in a recent Inner Circle Community call, he revealed that he has only used crowdfunded an investment once. He is also currently using this strategy for a large housing community build in Las Vegas. Experience taught him that you do not need to be accredited to engage in crowdfunding real estate investments.

You may also lower your limits for involvement using this strategy. Supporters for his Las Vegas build only need to invest $5,000 to get in on the ground floor. Until recently, the US Government limited crowdfunding campaigns to one million dollars. However, they have now set the cap at five million dollars.

Despite these advantages, there are a few notable drawbacks. There are a lot more administrative tasks involved than traditional capital funding syndication. Your books must be certified annually by a reputable CPA. Some platforms, such as Yieldstreet and Fundrise, specifically focus on private investments like real estate.

Perform your due diligence, and inspect every detail. Consider that crowdfunding will take more effort to set up than what you are used to, but if you have contacts eager to invest in your property using this method, it might be right for you.

Join Our Community

Do you own multi-family properties? If not, do you aspire to one day? Then you should consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. It’s not as easy as it looks! Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

Jul, 2024

Can You Climb the Six Rungs On The Ladder Of Success?

Success coach Trevor McGregor has guided winners, including everyone from Olympians to real estate moguls. One of his most requested subjects? The six rungs on the ladder of success. The little things compound when you invest more in your success and climb that ladder. From step 1 to step 2 is a mile – a big step! However, the farther you climb, the shorter the distance between steps. This ladder principle applies to every aspect of our life, from our real estate business to our marriage, as well as our diet and exercise.

Climbing The Ladder Of Success

A businessman climbs the ladder of success in the real estate industry

What are the six rungs on the ladder of success, from bottom to top? They are showing up:

1. Poor
2. Good
3. Great
———————-
4. Excellent
5. Outstanding
6. Extraordinary

Most people can get to the third rung with a little effort, but can you climb up above that middle line, which leads to the “Excellent” rung?

When your effort is poor, you will get pain as your result. Playing good will only get you poor results, while great work means good results in your future. Excellent effort will get you great results. Outstanding effort results in Excellent Results, but only extraordinary effort will yield outstanding results for you. That extraordinary work is the only way that you can reach outstanding results when climbing to the top of the ladder of success.

Join Our Community

Do you own multi-family properties? If not, do you aspire to do so one day? Then you should definitely consider joining our online discussion group, the ATL Inner Circle Community! Each month, Rob Rowsell will teach you what you must do in order to build wealth in the real estate business. Property taxes, liens, and legal fees can all be hard to navigate, so having a successful guide in your corner like Rob is a must! Sign up today!

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