What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures Author: Frank Gallinelli | Language: English | ISBN:
B004BKIEUS | Format: EPUB
What Every Real Estate Investor Needs to Know About Cash Flow... And 36 Other Key Financial Measures Description
Formulas that make the difference between making profits and losing equityThe only way to win the real estate investing game is by mastering
the numbers. This revised and updated edition of the popular reference
shows how to target the best investments in the present market. It
answers all your real estate questions, and provides new discussions of
capital accumulation and internal rate of return. This book's basic
formulas will help you measure critical aspects of real estate
investments, including
- Discounted Cash Flow
- Net Present Value
- Capitalization Rate
- Cash-on-Cash Return
- Net Operating Income
- Internal Rate of Return
- Profitability Index
- Return on Equity
- File Size: 2334 KB
- Print Length: 312 pages
- Simultaneous Device Usage: Up to 4 simultaneous devices, per publisher limits
- Publisher: McGraw-Hill; 1 edition (September 8, 2008)
- Sold by: Amazon Digital Services, Inc.
- Language: English
- ASIN: B004BKIEUS
- Text-to-Speech: Enabled
X-Ray:
- Lending: Not Enabled
- Amazon Best Sellers Rank: #24,532 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
- #6
in Kindle Store > Kindle eBooks > Business & Money > Real Estate > Investments - #22
in Books > Business & Money > Real Estate > Investments
- #6
in Kindle Store > Kindle eBooks > Business & Money > Real Estate > Investments - #22
in Books > Business & Money > Real Estate > Investments
I'm a university business teacher and have an MBA, and I've taught a number of introductory courses in business finance, including processes for sizing up general corporate investments. I'm also familiar with methods for valuing stocks and bonds. I'm also a bit new to the United States so the implications of U.S. tax laws aren't entirely second-nature for me. Before reading this book, I had also purchased a couple small, single family investment properties that have worked out satisfactorily so far, but wanted to refine my approach using terms and methods that are native to the real estate investment industry. As an educator, I not only expect authors to provide information, but also, to help you practice your skills. Therefore, I tend to judge a book by how well it guides me in truly learning and understanding its concepts.
Overall, this book stood up well against my goals and expectations. The author's methods seemed consistent with general business practices in the various courses I've taught, but have been modified to fit the nuances of the real estate investment industry. I picked up a few things as well, mostly surrounding the impact of accounting rules on taxable income and financial ratios that are specific to real estate investments. I also liked how the author wasn't short on examples of the math in action. Within each chapter there is usually one or two example calculations, and then, at the end of the book, he repeats each calculation or ratio giving it a bit more explanation. He also gives you a problem to solve, with a solution provided at the end of the chapter to check your knowledge. In this end-section of the book, he also provides a bit more detail for each ratio than you find in the body of his work.
The book I read this week was What Every Real Estate Investor Needs to Know About Cash Flow by Frank Gallinelli. I feel I have gone back in time... sitting in the University library stewing over an accounting book. If I were reading an accounting book for this blog, I wouldn't even know what to tell you without risk of having you pass out due to boredom half-way through my first sentence. This will not be a long post because I will not be going in to detail on how to calculate a present value or future value formula. I will not be computing simple or compound interest and I certainly won't be laying out a amortization table. If that's something you are interested in learning you can buy an old accounting book on amazon for pennies (literally).
There is no doubt that the formulas and knowledge in this book have a purpose. Even though computer programs can compute the majority of these formulas it is nice to know what is really happening and what it means. For instance, you don't need to know how to do your own taxes and create a maximum refund, but you should know the skeleton of what your tax pro is going to be doing for you and what formulas are used. For real estate, pretty much every computation that you'll ever have to do can be done in Microsoft Excel. The more familiar you are with setting up an excel formula, the easier it will be to complete your pro forma.
The author has a website that has almost every formula you'll ever need. It makes a great reference when you are making your own formulas. Here is where you can find them [...]
The biggest eye-opener for me from this book were the 4 different means of making money from a real estate investment. I never thought of two of the ideas as means for making money, but they really are.
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