In this video, I explain the capitalization rate (cap rate) in commercial real estate, breaking down exactly what it means and how investors use it to evaluate properties. You’ll learn how to calculate net operating income (NOI), how property value factors into the formula, and how to put it all together with a clear cap rate example. I also walk through a free cap rate calculator you can use to run your own numbers on any commercial real estate investment. Whether you’re a beginner or looking to sharpen your underwriting skills, this five-minute breakdown covers everything you need to know about cap rates.
Chapters
0:00 – Capitalization Rate (Cap Rate) Defined
0:38 – Net Operating Income (NOI) Explained
1:55 – Property Value Explained
3:20 – Cap Rate Example
4:15 – Free Cap Rate Tool
🎓 *Wharton & Wall Street Prep Real Estate Investing & Analysis:* https://ryano.finance/wharton-real-estate
*Free Cap Rate calculator:* https://ryanoconnellfinance.com/calculators/cap-rate-calculator/
*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.
