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Mike (@TheRealEstateG6): Zero To One In Real Estate

Value Hive Podcast

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Do You Use Discount Rates to Stabilize Yield?

The stabilize yield is basically like just the inverse of a multiple, right? So you buy it four times earnings, right? Stable out you you buy four times N.O.I. and if you have that spread between, you know, the yield you paid for them and then the cap rate, then you end up selling at six to eight times N.o.I. Exactly. Yeah. And then the second thing, youknow, just basically thinking about discount rates in the sense of like in stocks, you can apply a discount rate to future free cash flows. Depending on the discount rate, you can flex how much confidence or how much doubt you have in the actual value

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