Discounted cash flow analysis for real estate is widely used, yet often misunderstood. In this post, we’re going to discuss discounted cash flow analysis for real estate and clear up some common misconceptions. As you follow along, you might also find this discounted cash flow analysis calculator helpful. What is Discounted Cash Flow Analysis? Discounted …
The first task in any real estate investment decision is to build a proforma, which is just a word that means cash flow projection. In this guide, we will define the term proforma, look at an example of a simple real estate proforma, review a more complicated real estate proforma, and also discuss some nuances …
What is the difference between a cap rate and a discount rate? Because these concepts are often confused, this article will discuss the difference between a capitalization rate and a discount rate in commercial real estate, and leave you with a clear understanding of the two concepts. As you follow along, you might also find …
Commercial real estate can be broken down into several different categories. At a high level, when people think of different types of commercial real estate, they typically think about shopping centers, office buildings, or warehouses. But the commercial real estate industry is much more precise when it comes to defining property types. Below is a …
What’s the intuition behind Internal Rate of Return (IRR) and Net Present Value (NPV)? Discounted cash flow analysis is an essential tool in the commercial real estate practitioner’s tool belt, but unfortunately for many people, there is still a lot of mystery surrounding this concept. First, let’s get some definitions out of the way, and …
People will often say that they want a commercial real estate career, but quickly discover that “commercial real estate” is a vague job description and can literally mean dozens of different things. In this post, we will discuss various commercial real estate career paths to better understand the major players and the structure of the …