Real Estate Investment Return Targets To Shoot For (3 Metrics)
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- čas přidán 14. 07. 2024
- Real Estate Investment Return Targets To Shoot For (3 Metrics) // Valuing commercial real estate is not an easy task, even for the most experienced investors.
Commercial real estate deals are generally priced by investors based on the expected returns the property can generate, with investors essentially back-solving to a purchase price that would end up producing the investor's target value for each of the metrics measured.
On that note, though, one of the hardest parts of commercial real estate valuation is deciding on what those target return values should be, based on the specific details of the deal being analyzed, and the risk profile of the project as a whole.
So to address one of the most frequently asked questions in Break Into CRE coursework and in the Academy around what IRR, equity multiple, and cash-on-cash metrics are considered "good" returns, in this video, we'll walk through the most common return targets for commercial real estate investors today, and how you can apply this same thought process to your own acquisition and development opportunities in the future.
More detail on IRR targets here: • What a Good IRR Looks ...
Enroll in the free Break Into CRE Real Estate Financial Modeling Crash Course here: www.breakintocre.com/free-cra...
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![Cash-on-Cash Returns Explained [Full Breakdown]](http://i.ytimg.com/vi/WmSD1na8xK8/mqdefault.jpg)
What are the return metrics and targets for those metrics you use on deals you're considering?
net effective yield for lease opportunities based on pv of cash flows and the prorated amount of the investment basis
unlevered stabilized yield on cost
Thank you for your valuable information.
Fabulous brother! Great guidance, hope to see more such amazing and informative videos.
Good stuff. Easy with the blinking mate.
I love this page. Thank you for this wealth of knowledge. I’m going to go through the courses offered online.
Great to hear you're finding the videos helpful, Pamela!
I would love to see a video on Model sense checks on calculator (e.g. EM ^ (1/years) = IRR approximation)
We usually look for IRR 14 and up . The cash and cash we look for 9% and up. Can you make a video on different business plans. - Madeline
Great feedback and suggestion - thank you, Madeline!
💯
I took some of your online courses and they are fantastic. Great videos, right to the point! Thank you Justin
Great to hear, Hagai! Glad to have you in class!
Here's a question: for equity investors, at the time of a liquidation event which is more common for equity investors: they get all their capital returned and then the equity split happens OR is more common than at the liquidity event net profits are split simply based upon the equity split?
I have owned a variety of real estate properties over the years but no commercial. I am going through your videos and will take your courses. Do you offer any service to assist in analyzing perspective deals I might be considering?
Hey Justin - Im a student of yours on Udemy - great classes. Do you have any recommendations for courses (at your quality level preferred) that cover market research. Thanks!
What returns are people looking for in development deals?
It’s starting to feel like as an investor only need to ask: “tell me your EM over what year holding period”
bro i’ve been trying so hard to “break into cre” ive taken the time and money to learn the relevant financial and analytical skills, i have sales experience, i have past experience dealing with investments professionally. something is not right... i’ve never been more cold shouldered by any industry. i’m a personable guy. the only thing missing on resume is elite college. i don’t know shat’s wrong with me anymore... i’m not complaining i’m just exhausted
Hi Henrik, how are things going for you a year after making this post?
I spoke with a Capital Market Director at JLL located in Phoenix. He told me around 2-3 years after college it is possible to make around 200k a year, is that realistic?
This would be as an analyst, I was just curious since he mentioned a base salary plus a commission.
If you somehow become a top producer than yes. Chances of becoming a top producer in that short time frame? Very little
Stocks are crashing bitcoin investment right now will be at every wise individual's list. In two to three years you'll be be ecstatic with the decision you made today.
Stocks are good but crypto is better
EXACTLY
You're right investing is the key, 🙂🙂
Nice words
While that's generally true, it's concerning that several of the richest, most successful investors are sitting on the sidelines right now and waiting for a better entry point
So true lol it doesn't make sense
Thanks dear for introducing me to Mrs Hatasha really a big appreciate all your efforts
the first investment with Mrs Hatasha gave me profit over $23,000 Us dollars and ever since then she has never failed to deliver.