Passive Investor Blog

Financial Independence vs Burnout (3 minute read)

Financial Independence vs Burnout (3 minute read)

We have a serious problem; a complex and busy life is robbing you of your future wealth, health, and happiness.  My neighbor was a fighter pilot and graduated wing commander; he dedicated 31 years of his life to the United States Air Force and America.  After he retired, he started his own business and ran that for 20 years. 

Read this to find out what happened when he retired…it alarmed me and made me think about what I was doing with my life.

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What is the Historical Annual Rate-of-Return on Real-Estate Investments? (8 minute read)

What is the Historical Annual Rate-of-Return on Real-Estate Investments? (8 minute read)

9.4% – 10.5% …maybe.
Anyone can cherry-pick and alter numbers of expected returns based on website choice, experience in a diversified market, and what type of real estate invested in. The market as a whole seems to generate an average number around 9% – 11%. Realize that average number means that there are some that make much more and that some lose everything!

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What is a CAP Rate? (7 minute read)

What is a CAP Rate? (7 minute read)

What is a CAP rate and how do you use it in commercial real estate?

Capitalization Rate (CAP Rate) is one of many terms used to determine the value of a commercial property that is leased for profit; it is another way to determine the rate of return.  Cap rates are strongly driven by the income the property is expected to generate but also influenced by the larger area and sub-market where the property is located.

CAP rate = NET Operating Income (NOI) / Current Market Value (expressed as a percentage)

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