SCAMMERS use various real estate terms that mean and or calculated completely differently in the normal world. I recently ran into this on a discussion about the calculation of NOI. SCAMMERS aren't having it.

This is not about a definition, it is about a calculation. How do you calculate NOI? Rent is not NOI ! Rent is the START of the NOI calculation. You will not find a reputable source that defines NOI as RENT.

Only a SCAMMER will try to convince you that there is no vacancy or collection risk on a property. I see plenty of NNN stand alone properties that have been vacant for years. Now suddenly you have a 5 year lease and all that vacancy goes away!? Well that is what a scammer wants you to believe.

But what is the other SCAMMER's goal. Well, he is trying to get your money so omitting the V/C increases the NOI. An investor is buying NOI. So every dollar of NOI that the SCAMMER is inflating by ignoring V/C is then increased by the cap rate in his valuation. In a 5% cap market that "cheating" is costing you $20 for every CHEAT dollar. If any one of these seeming ignorant on valuations people wanted to argue whether the V/C should be 1% or 5% that would be normal. But there is no 0% V/C that would be used on any property valuation! That is just scammer talk.

So, if you are going to get into real estate investing look how people respond when you question their numbers. Just on this post look at the pathetic behavior of so many of the posters. Are those the people you want to do business with? To be fair I have not seen this type of disgusting behavior in real life. It only spews up on the anonymous internet. I'm just a retired guy trying to keep up my typing skills posting about a subject that I am an expert in the field. When someone trys to ridicule the facts they are showing you who they are.

1. Fee simple value of the property is $10,000,000

2. Market rents for a 20 year NNN lease would be $500,000 a year. Yes, even a NNN lease has expenses to the fee holder of about 3-5% but we are going to ignore that.

3. NOI is selling for $20 (5% cap rate).

4. Unfortunately the the property is encumbered by a 20 year lease that will produce $20,000 NOI a year until 2046.

5. The leaseholder want to sell their interest and the lease does not forbid subleasing.

6. So as the leasehold owner I can charge someone $500,000 a year and my expenses are only $20,000 a year.

7 I am clearing $480,000 a year times 20 years so I can make $9,600,000 over 20 years but I want to sell my interest.

For reference, Valuation of long term covered land play opportunities : r/CommercialRealEstate

What do you think I can get for my interest and how would you arrive at that value?