I have been trying to get my head wrapped around all of the calculations used on investment analyses of RTO deals. One calculation I can’t figure out is the lease payment…. some RTO deals use a rate of .007….Is there a formula for how this is calculated. I have read most of the posts regarding RTO’s as well as Mark Loefflers book. On page 122 of the book, he speaks of the lease rate. He says he uses a lease rate in the range of 0.8%-0.95%. Why pick these numbers?
This question has been asked before but I can’t seem to find a satisfactory answer. I am thinking there has to be some mathematical explanation for this calculation. Please help.