Focus on your building's current net operating income, not future projections. Recovering $20,000 in annual NOI adds roughly $330,000 in value at a 6% cap rate. One owner was leaving $24,000 on the table through below-market rents, absorbed utilities, and an outdated vendor contract.
Every one of those points to the same conclusion. Your building has to work on today's numbers. Not projected numbers. Not post-rate-cut numbers. Today's. $20,000 of recovered annual NOI is worth over $330,000 in building value at a 6% cap rate, and that holds whether rates fall next year or not. We found $24,000 of annual income he was leaving on the table. Units below market, utility costs he was absorbing, and a vendor contract that had crept up over 3 years. Same rates, same market, stronger building. Buyers and lenders are both underwriting today's income. Let's make sure yours tells the strongest story it can.
