RTO lease rate question...

  • Tyson

    Status: REIN™ Member

    Posts: 16
    Joined: 17 Mar 2011
    From:

    Greetings:

    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.

    Thank You,
    Tyson 

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