Core Investment Management Group, LLC

How do you determine if the investment, whether it is a real estate investment or business opportunity, is right for your portfolio?  Is there a way to determine or calculate the maximum amount you should pay for an investment and still achieve your investment goals? What is your desired return on the investment?   Let me introduce the infamous “CAP Rate”.  The CAP Rate (Capitalization Rate) is one of the most misused acronyms propagating investment calculations.  While many investors claim to use the cap rate to determine the value of the investment, it is more commonly misused to make assumptions about value.  Many brokers and lenders will take an investment’s net operating income and divide it by the “asking price” and out pops the Cap Rate.  However, this method only tells us what the projected return will be in one year using an “all cash” investment.  How many people actually use all cash to purchase investments?  The method described does not take into consideration the vario

INVESTING FOR CASH FLOW             If you cannot take it to McDonald's and buy a burger with it-- IT IS NOT CASH FLOW .  Building assets in your investment portfolio is not a bad thing, but it should not be your primary goal.  I believe building assets for future appreciation is an excellent goal once your cash flow investments are set in place.  Far too many people are investing the wrong way by starting their investment plan only investing in stocks, usually expensive mutual funds, which may not even pay dividends.  Where is the cash flow logic in this plan?              When I ask people why they are investing I typically get the same answer, future retirement.  But, when I ask how they will use their assets in retirement their logic gets a little fuzzy, especially when I ask them how their assets provide the retirement income they need.  Of course, the frequent answer is we will sell off the assets a little at a time to provide income for us during retirement. (The 4% Rul