Many real estate investors determine the value of an income property by using the capitalization rate, also known as the “cap rate.” However, this is absolutely the one most misused word and concept in real estate investing.

What is it? A real estate broker prices a business and its associated building by taking the Net Operating Income (NOI), dividing it by the sales price or, alternatively, the current market value; then you get the “published” capitalization rate.
While brokers, sellers and lenders are fond of quoting deals based on the cap rate, the way it is typically used, they really shortcut the true use of the real cap rate.
For example, let’s say the property has an NOI of $155,000, and the price is $1,155,000.
$155,000 / $1,155,000 = 13.4% cap rate

But what does that number really mean? Does it tell you what your return will be if you use financing? Absolutely not. Does it take into account the different finance terms available to different investors? Absolutely not. Then just what does it show?

To read the entire article, please visit AZNOW.com, where I have a monthly column - VIEW HERE!

Thank you for stopping by and reading this article. Feel free to share, like, post, comment.

Regards,

Pete Baldwin

Designated Broker

Platinum Realty Network

With the economy showing positive signs of recovery, savvy business owners and professionals are getting smarter about where they put their office and how to run it more efficiently — and for half of the expense.

They are asking for lower rents, more benefits and less responsibility.

With the surplus of office space available, renters are now in a place of negotiating power when it comes to leasing a commercial space. However, there are a few things that you as a property owner can do to make sure that you keep your negotiating power in place and keep it fair, yet profitable for you.

1. Change name for type of office space

By adding in higher level titles to an office space such as an “Executive Suite” or “Commercial Loft,” you can give more value to the space as well as make it more attractive. By placing more of a “city style” approach in the marketing of your space, you can attract larger prospective tenants. This can also help you create more of a demand for the space which puts you in a better place when it comes to who you lease to and exactly what the terms should be.

To read the entire article, please visit AZnow.com, where I have a monthly column- view here!

Thank you for stopping by and reading this article. Feel free to share, like, post, comment.

Regards,

Pete Baldwin

Designated Broker

Platinum Realty Network

Okay, here it is- my latest blog post for AZNow.biz. Would love your feedback, comments, experience posts on this topic-

Real estate development in Phoenix and the surrounding areas has always been trend setting and market changing. When newly developed, outlying residential areas boomed, what lacked in these areas was retail, medical and industrial commercial. Over the past five years, the commercial sector has been heavily overbuilt and is now undergoing a zoning face lift.

Read The Entire Article Here

Committed to my client’s success,

Pete Baldwin

Designated Broker

Platinum Realty Network

Click here to read

As the economy improves nationwide, Arizona is paving the path for commercial investment portfolios and green development projects. Remember to work with an experienced commercial real estate broker when doing your research.

Here are the different commercial sectors worth consideration as you grow your investment portfolio: 

My latest on AZNow.biz

Enjoy,

Pete Baldwin

Article- Although the commercial market seems dismal in certain areas of Metro Phoenix, the Scottsdale area seems to only have taken a ‘gentle’ hit. With investors flying into Phoenix from all over the world to look at commercial properties for investments, they tend to start their search in the upscale Scottsdale area where there is a very healthy mix of industrial, light industrial, office, office/warehouse and mixed use which tends to fit the palette of the many different types of investors.

The overall sense of urgency when buying a commercial property seems to be relatively high in Scottsdale; in fact, the mindset of buyers coming into Scottsdale is to find a great buy in a great location. The reality is that those great deals are snapped up sometimes before they hit the market or they are just simply gone, so the buyer’s expectations are not met.

To read the complete article, visit here

Best,

Pete Baldwin

scottsdale golfing

Great article from one of our team members- Dena Durelle

Great golfers have a secret ……no, it is not good pain meds or a flask of vodka in their golf bag. They know what it takes to maximize their golf swing while reducing their risk of injury. The bad news is that as we get older our bodies tend to lose flexibility. In order to combat this unfortunate occurrence, it is imperative that we work on flexibility on a daily basis. The name of the game is “TIME”. There are 3 elements to understand by the term “Time”. How often to stretch, when to stretch and how long to stretch, all being factors of “Time”.

Check out the full article here

Pete Baldwin

Click here to view the embedded video.

Kindly,

Pete Baldwin

Click here to view the embedded video.

Kindly,

Pete Baldwin

When you have a vacation home in Scottsdale, you can enjoy the nightlife with over 90 restaurants and clubs or window shop through over 320 stores located in downtown Scottsdale (according to scottsdaledowntown.com). Escape to the local theatre or stroll the farmers market. Whether you are retired or need a vacation getaway, Scottsdale is filled with activities, resorts and night-life galore.

2) Unbelievable Real Estate-

When looking for a vacation or second home, you can often come across high priced homes that might not offer all of the luxuries you can find in a home located in Scottsdale. Scottsdale is one of the premier places where you can find amazing pieces of real estate that are reflective of the asking prices. Make sure you work with an agent that has extensive knowledge of the area as well as the second home market.

3) Additional Income-

When you make an investment in a vacation home in Scottsdale, you have the ability to make a considerable income. You can simply rent your vacation home out when you are not using it or even use it for event and private wedding reception rental. Make sure that you find a property management company that has the experience and references to manage your investment.

4) Country Club Benefits-

There are dozens of homes featured for sale in many exclusive and in demand Country Clubs in Scottsdale. Enjoy your retirement or vacation on a golf course with prestigious events and exquisite member benefits. If you are looking for a home at a specific club, check to make sure that your agent is Country Club Certified, which means they know every Country Club in the area, the benefits as well as the club’s reputation.

5) It’s a Great Place to Have a Sunny Home-

If you live in or near the snow or cold weather, then Scottsdale is the place for you to have a second home. Snow fall in Scottsdale is not routine and the sun loves to shine. This is a great way for you to enjoy an escape away from the cold year-round, as little or often as you want.

These Tips provided by Pete Baldwin, Designated Broker and Owner of Platinum Realty Network with offices in Scottsdale and Flagstaff Arizona. With over 25 years of experience in business and real estate, Pete specializes in country club communities and second home investments. He also owns an Arizona branch in a family owned company- Baldwin Log Homes – Arizona Territory and has become the area leader in fully custom handcrafted log homes in Northern Arizona.