Definition of Terms – Cash Flow Analysis
Following is an explanation of the terms as shown on the “cash flow analysis” statements that may help you in your decision to buy a particular property:
Income building would receive if fully rented 100% of the time.
Percent per year units are vacant. This figure can vary up or down depending on market conditions and management.
What is left after vacancies.
Total expenses which include real estate taxes, insurance, gardener, management, repairs, reserves for repairs/improvements, and utilities.
Amount left after vacancies and expenses.
Interest deducted as result of mortgage and depreciation (writing off the building/paper loss).
Cashflow after you deduct Mortgage payments from net operating income. (Can be a positive or negative number.) Also known as “net spendable income” or “cash on cash return.” To figure cash on cash return as a percentile, divide before tax cash flow by the amount of the downpayment.
Cashflow received after you add the “before-tax cash flow” and the amount of money you would get back from the government (taxes saved for the year against other income) from the taxes you would not have to otherwise pay because you had this investment. SEE YOUR ACCOUNTANT REGARDING THIS NUMBER.
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(916) 203-1260. email@example.com.
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