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What is a Cap Rate?

Ep. 47

Today is going to be our all-encompassing, definitive episode all about on cap rates! What are they? How they are used? What’s the whole deal here? Tune in to find out!


We discuss how they relate to interest rates, what they indicate, what they’re useful for, what they’re used for on a day-to-day basis in real estate investing, and how you should be thinking about cap rates if you’re thinking about getting into the real estate investing world. We also give several examples of how to find the cap rate!


Key Takeaways:

[:11] About today’s episode.

[1:01] What is a cap rate?

[2:59] A quick example of how to find the cap rate and what it indicates.

[4:51] How cap rates relate to interest rates.

[7:52] What cap rates come down to and what’s important to remember.

[10:51] The useful thing about cap rates!

[11:29] How those in real estate use cap rates on a day-to-day basis.

[14:24] A range of where cap rates fall now.

[16:27] How you should be thinking about cap rates if you’re thinking about getting into the real estate investing world.


Mentioned in this Episode:

Cap Rate


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5/23/2019

We Talk about a Purchase Agreement

Ep. 48
After 2 ½ years of looking for a software business to buy with my partner, I think we’re finally getting towards the end! And at the end of the due diligence process when you’re going to buy a company… you’ve got to sign a purchase agreement. This purchase agreement is the big contract; it’s the document that lays out all the final terms and conditions. And when it’s signed, the money is wired — and it’s official: you own the company.So because this is all so timely for us, today we’re going to be talking all about purchase agreements! In fact, we’ll be going through the actual 57-page document I received for this software business to explain each section to give you all an idea of what to expect when it comes to negotiating your first purchase and sale agreement!Key Takeaways:[:11] About today’s episode on purchase agreements![2:22] We begin looking at the 57-page purchase agreement word doc, starting with an overview of the table of contents and section 1, the glossary.[5:09] Reviewing section 2: the purchase and sale of parent shares.[9:40] Reviewing the following three sections that cover representations and warranties — first up, those concerning the company.[16:30] Next up, we take a look at the sections covering representations and warranties of the sellers.[17:55] Taking a look at the representations and warranties concerning the buyer.[18:58] Reviewing the section that covers the additional agreements.[19:52] Checking out section 7: identification and related matters.[23:03] Wrapping up the podcast with some final points about purchase and sale agreements![24:54] What should you be focusing on when negotiating these documents?[28:14] Thanks for tuning in!Mentioned in this Episode:Purchase and Sale AgreementFor More on The Alternative Investor, Check Out:TheAlternativeInvestorShow.comThe Alternative Investor on iTunes — Leave us a review!