How to Determine Cash-Flow For Rentals
admin | December 10, 2008 | 2 comments
This video explains in detail how to use a parameter that is commonly used to evaluate investments in the stock market. But here you can learn how to apply this tool to income property. Looking at proeprties from a cash flow perspective helps you make a sound investment decision and eliminates confusion about values and the bad news in the media…
Note how the presenter mentions a P/E ratio of about “11″ as being a good solid cash-flow investment in Southern California. If you apply his formula to our available wholesale deal (click here), your P/E ratio will be:
$190,000 (purchase plus repairs) / $33,600 (one year rent income) = 5.64 (!!!)
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Category: Financing, Investment, landlord, Los Angeles, out of state
There is obviously a lot to know about this. I think you made some good points in Features also.
Hello, could you tell us more about these things, you seems like an expert in this aspect.