Just realized I've been calculating cap rates wrong for 3 years on my multifamily deals

I was comparing notes with a broker over coffee last month and he pointed out I was using net income instead of net operating income (forgot to subtract the reserves line). Has anyone else had a basic metric suddenly click way later than it should have?

2 comments

2 Comments

graydavis14d ago

Oof that's a rough one. We've all been there though with something basic that somehow just never clicked.

stella_lane14d ago

Ha, @graydavis you're not wrong but I gotta push back a little here. I don't think it's really "basic stuff" that trips people up. More like the way we learn things is totally random and sometimes a piece just doesn't stick til way later. Like I still can't fold a fitted sheet right and I'm in my 30s, that's not basic that's just my brain saying nope not today. So yeah we've all been there but let's not sell ourselves short by calling it easy stuff.