Why do real estate investors not discuss EVA? Why can’t I get a sense of profit post interest and tax rates
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[{"id": "hrtblwp", "text": "Because interest and taxes vary for everyone.  Someone who is an undesirable borrower that doesn\u2019t make much will have very different options, returns, and tax rates than someone who is an excellent borrower that makes a ton of money.\n\nIgnoring interest and taxes allows us to put everyone on the same playing field and talk about deals fluently.  Trying to include taxes and interest rates would make deals impossible to talk about or understand.  \n\nThere\u2019s just to many variables, and since it\u2019s all individual, it\u2019s on the individual to know what their tax rates and interest rates are.", "replies": [{"id": "hrtbr8k", "text": "If I\u2019m an investor in a crowdfunding campaign that has a fixed rate loan am I not wise to want to know the EVA?", "replies": [{"id": "hrtdxe1", "text": "Your title was extremely vague so I made a shot in the dark as to what you were actually asking about.  \n\nIf you\u2019re investing in a syndicated deal, you should definitely know their rates.  If they\u2019re not sharing them, it\u2019s either because they don\u2019t know or they\u2019re speculating and don\u2019t want to share.  Either way, I wouldn\u2019t put money into it", "replies": [{"id": "hrtfq4o", "text": "If a private equity has bought a property with a fixed rate loan of 4.65% and they have $103M of senior debt is there a way to calculate monthly interest payments", "replies": [{"id": "hrtqy7f", "text": "You could if you know what kind of loan it was and what the term was.  But if you don\u2019t know that, it\u2019d be hard", "replies": [{"id": "hrtun0f", "text": "Fixed rate interest only loan 4.65% fixed whole term for 10 yrs with the potential for the interest rate to decrease", "replies": [{"id": "hru1oa5", "text": "You could approximate the sr debt (https://www.calculatestuff.com/financial/interest-only-calculator). Depending on how the loans were negotiated, the interest could be calculated based on 360, 365 or actual number of days as well as other variables.", "replies": [{"id": "hrusdb9", "text": "I don\u2019t think I\u2019ve ever seen an actual / 365 in my 15+ years in the industry, everything has been on 360\u2026. Either way the difference in payment isn\u2019t material if your compounding with the benefit of an extra 5 days or not.", "replies": [], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "hrvf2vq", "text": "Because different people have different tax strategies. Good tax strategies are not a one-fit-everyone. For example, I work with clients in Latin America and clients in the US and the way we structure deals for each other is VERY different. I also have a different tax strategy than someone earning 1,000,000 a year would have.", "replies": [], "depth": 1}]