FAQ's

It is the return on an unleveraged transaction, calculated as the amount the investor made on the property in relation to the amount invested in the same year.

The ratio of cash available to debt servicing for interest, principal, and lease payments.

A summary of the key financial, business, and legal information defined in a commercial transaction.

Difference between the interest rate and the amount of interest you are actually paying for the loan payment

It is the average rate businesses pay to finance their assets. You calculate it by averaging all the company’s sources of capital, i.e., the rate of debt and equity weighted by proportion. If it is higher than your cap rate, you will lose money. If less, you will make money.