Investment Real Estate Terms

When pricing a property we carefully balance out Cost per Square foot, Gross Rent Multiplier, CAP Rate, Cost Per Unit, and Cash Flow and compare with the most comparable sales in the area.

NRSF= Net Rentable square feet

Cost per NRSF= Price/NRSF

Cost per unit= Price/# of units

Expense/NRSF= Total Annual Expenses/NRSF

Expense per unit= Total Annual Expenses/# of units

GRM= Price/Gross Income

CAP= Net Operating Income/Price

Pre Tax Cash flow= Profit after paying all expenses including loan. (Percentage is that #, divided by the down payment)

If built after 1978 in Los Angeles= Not subject to LARSO*

Pro Forma= Rent you could get for that unit if it was vacant today

*Typically: Buyer to verify.