Call us now at: 208-233-0740
At Axiom, we believe Cash Flow is king. Cash flow can ride out bad markets, offset capital improvement costs and most importantly, make you smile each month.
Most investment mistakes aren’t the result of poor performance, but poor analysis. With Better Analysis, we can help match investors with real estate that can hit their investment goals.
Ongoing access to an investment professional can help you make investment decisions logically, calmly and strategically. If investing is like a sport, we’re like the coach.
The longer we wait to Invest, the less we make
First things first- talk with one of our real estate investment advisers to establish a plan to hit your investment, retirement and passive income goals.
Investing intelligently is about being patient enough to wait for the right investment, but quick enough once it’s available so that we don’t lose out.
Saving cash flows for purpose of reinvestment will make sure our investment portfolio grows and investment discipline is maintained.
Even when a property has a great cash flow, sometimes the investment plan calls for selling. Our analysis can help determine when that time comes and at what price a sale is merited.
There is a lot of confusion and different ways that investors measure the ROI on their investment portfolio. The term ROI, which stands for “Return On Investment”, in real estate is most accurately defined by the Internal Rate of Return (IRR), which is comparable to how the compound rate of return on a stock or CD investment is calculated. Many investors talk as though Cap Rate or Cash on Cash returns are synonymous with ROI. While good for specific aspects of the analysis on a piece of investment real estate, they are not an accurate depiction of ROI. Click on the tabs below to learn more about the difference between property level analysis and Investor level analysis.
Property Level Returns: Property level ratios measure the performance of the subject property without considering any investor-specific assumptions and without regard for who’s investing in it. I.e.- property level analysis does not take into account loans on the property, acquisition costs, administrative expenses or tax brackets. Instead it looks only at the operating income expenses of the property itself.
Common Property Level Return measurements are Net Operating Income (NOI), Capitalization Rate (Cap Rate) & Gross Rents Multiplier(GRM). A GRM is used in a variety of ways- If you’ve ever heard somebody say they use a factor of monthly or annual rents to determine a purchase price of an investment- that’s essentially just a variation of the Gross Rents Multiplier.
Investor Level Returns incorporate all of the data from the property level analysis and then integrates Investor specific data such as total funds invested, acquisition costs, loan terms, payments, etc., capital improvements, Cost Recovery schedules, the investor’s income tax bracket & more. The point is to be fully comprehensive so that we can calculate what our true Return on Investment is.
Common Investor Level Returns (which can be calculated before or after Tax) are: Cash on Cash (CC), Internal Rate of Return (IRR) and Net Present Value (NPV). Many investor level analyses are based on Time Value of Money (TVM) concepts, which require forecasting of future year performance in order to establish a rate of return. Because of the increased intricacy, inaccurate assumptions can easily paint the wrong picture, resulting in bad decision making. We highly recommend investors seek guidance from industry specific experts when running Time Value of Money calculations. Experience in analysis can be the difference between a really bad and a fantastic investment. To find out more, click here.
©  · Axiom Properties & Development Inc.