Know your NNN investment inside out
[{"id": "eq5gpig", "text": " defer capital gains taxes if you exchange your old property for a NNN property using a 1031 Exchange.", "replies": [{"id": "eq9zuw2", "text": "You state, \"**Capitalization Rate \u2013** *The CAP rate or Capitalization rate is used by investors to determine the net operating income produced by a property. It is calculated by taking ot the ratio between a property\u2019s current market value and its net operating income. For example, if the current market value of a property is $1m and it is generating an annual income of $200K, then it\u2019s CAP rate will be ($200,000/$1,000,000) = 20%. In simple words, the more the capitalization rate of a property, the greater will be its net operating income.\"*\n\n&amp;#x200B;\n\n1. First, it is not used to determine net operating income.  And you stated calculation involves using the NOI.  If you have the NOI then...\u2026?\n2. Cap rates come from an income approach to value called direct capitalization.  It is used to value NOI's.  It is not a return or a profit metric.\n3. There is a formula to calculate NOI.  PGI-V/C less operating expenses =NOI.\n4. You have everything completely wrong.  If you are going to operate in the RE professional space you should learn the concepts and usage correctly.", "replies": [], "depth": 2}], "depth": 1}]