A cap rate is a rate that helps real estate investors evaluate an investment property. Our free cap rate calculator generates a property’s net operating income and cap rate based on inputs including property value, gross income and operating expenses. Investors can then decide whether the property is a good value. Capitalization Rate Calculator Rule…
Net Operating Income for Real Estate Investors: How to Calculate NOI Formula
Net operating income (NOI) is a calculation of the income generated by a real estate investment. It measures the amount of cash flow generated by an investment property after operating expenses but before principal and interest payments, capital expenditures, depreciation, and amortization. Investors use NOI to determine the value and profitability of an income-producing property….
Carrying Costs on Real Estate Investments – 2018
Real estate carrying costs are the costs an owner must pay on an investment property during the time he or she owns it. The most common carrying costs are paid monthly and include utilities, mortgage payments, taxes, property insurance and more. These carrying costs apply to both fix-and-flip investors and buy-and-hold investors. What Are Carrying…
Balloon Mortgages: Rates, Payment & More
A balloon mortgage is a loan in which a large portion of the principal is repaid in one payment at the end of the term. Investors use a balloon mortgage to qualify for a higher loan amount, lower rates, and lower monthly payments. Balloon mortgage rates typically start around 4.5 percent with five- to seven-year…
Capitalization Rate Formula & What a Good Cap Rate Is
A capitalization rate, or cap rate, is used by real estate investors to evaluate an investment property and show its potential rate of return, helping decide if they should purchase the property. The cap rate formula is cap rate = net operating income/current property value. A good cap rate is typically higher than 4 percent….
Financing REO Properties: 2 Types of REO Loans
An REO is a piece of real estate that is owned by a lender after that property was unsuccessfully offered at a foreclosure auction. Financing real estate owned (REO) properties typically is done with two types of REO loans: hard money loans and conventional mortgages. REO loan rates are 4.5% to 12% with terms of…
Jumbo Loan: Rates, Limits, & Requirements
A jumbo loan is a mortgage that has a maximum loan amount above the conforming loan limit set by the Federal Housing Finance Agency (FHFA). In 2018, the jumbo mortgage limit for single family homes is any mortgage above $453,100 in most counties, but it can reach as high as $679,650 in others. If you’re…
Interest Only Mortgages: Rates, Qualifications & Providers
An interest only mortgage features monthly payments that only cover the interest and don’t include repayment of the principal loan amount. The principal is refinanced or repaid by the end of the term. Many real estate investors like interest only mortgages because they have very low monthly payments despite having mortgages rates between 6 –…
Delayed Financing Rates, Qualifications, & Lenders
Delayed financing is a strategy in which an investor purchases a property all cash and then quickly takes out a loan on the property to get their cash back. Generally, the lender will lend up to 75 percent LTV and rates start at five percent. Delayed financing allows you to compete with all-cash buyers and…
3 Types of Apartment Loans: Rates, Terms & Qualifications
Apartment loans can be short-term or permanent loans that fund the purchase and/or renovation of an apartment building with rates from 5 percent to 12 percent. Investors typically use apartment building financing to purchase properties with more than five units that can generate cash flow, build equity, increase leverage, or earn capital gains. If you’re…
Cash-out Refinance for Investors: Rates, Terms & Lenders
A cash-out refinance occurs when investors take out a new loan on an existing property to extract equity from that property. Cash-out refinances happen when investors refinance for more than the current mortgage and receive the difference in cash. Cash-out refinances require at least 30 percent to 40 percent equity and have rates around 3.25 percent….
Investment Mortgage Interest Rates: Current Rates & How they Work
Investment mortgage interest rates currently range from 4.75% to 13%, depending on loan type and borrower qualifications. For shorter mortgages like hard money loans with terms up to three years, rates range from 7.5% to 13%. For permanent mortgages like Federal Housing Administration (FHA) loans with terms up to 30 years, rates range from 4.75%…