00:00 | Enter annual operating expenses

Next, review Income and Expenses. The sample has nine hundred eighty-seven thousand two hundred dollars in base rent, plus three hundred eighteen thousand five hundred dollars in reimbursements. Enter operating expenses with the correct annual amounts. Here we demonstrate the property tax expense, then inspect the prepared expense list. Total operating expenses are seven hundred thirteen thousand seven hundred dollars. The resulting in-place net operating income is five hundred ninety-two thousand dollars. Reconcile these figures before using them in the marketing document.

00:37 | Reconcile income, expenses, NOI and cap rate

At the example asking price of nine million two hundred fifty thousand dollars, that net operating income produces a six point four percent capitalization rate. Check that the valuation section and the displayed document metrics agree. We are using prepared assumptions for the multi-year portion of this example. The next financial lessons will explain growth, reimbursements, debt, reserves, and the difference between cash flow and pro forma. For now, confirm the in-place figures, then return to any written narrative that includes those numbers.