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Michael Mauboussin, Counterpoint Global – Everything Is a DCF Model (The Best Investment Writing Volume 6)

The Meb Faber Show - Better Investing

NOTE

The Discount Casual Model For Commercial Real Estate

The discount catual model also works for real estate. Owners of commercial real estate commonly seek to buy a building based on its potential net operating income, n o i. Cap rates capture the risk associate with the building's cash flows. We generaly don't think about valuing our homes using a discounted casual model,. But in fact, it applies to residential real estate as well. This is why we should be more careful when buying property and not rely so much on 'discounted casual' models.

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