I'm trying to get an idea how much a real estate company is worth if they own/control approx $60 million in real estate. Are there any formulas or calculators I can use? Can anyone give some advice?
1. It depends on the situation. If you appoint the real estate agent to sell your property you can get it free of charge, because it will be included into the commission that is agreed upon. 2. An employee who works for an Estate Agent do not need an Estate Agent License, but an Agents Representative License is a must. An Agents Representative License is between $600-$750. If you wish to open up your own Estate Agent office you need to have an Estate Agent Licence. An Estate Agent License is between $3,500 - $6,500 The employee have to pay for the license.
the $60MM by itself is not relevant. that number could be $60MM in other owners listings value, $60MM in property value that the company owns and controls directly, or they could have $60MM under management that they don't own, but perform property management. What is comes down to is what is the net income, or earnings before interest, taxes, depreciation and amortization. (EBITDA) that is realized as a result of dealing in the real estate. If its the real estate that is owned, it would be worth approx. 10-12 times the net earnings (or a cap rate of 8% to 10%)- formula (Income /Rate=Value). The income is consider to be NOI;defined as net operating income before debt service,but after operating expenses; if its the fees handling the sale or leasing of property owned by others, it would be a factor of 2.5 to 4 times earnings EBITDA (annualized), depending on how profitable the business was, the quality of long term contracts and what efficiencies new ownership might see in acquiring for upside. Follow this and you won't go wrong, but you really need to have real estate expertise to manage and execute the accounts and /or the properties.
Basically a $60 million Real Estate Business should have a balance sheet, income statement you can use. You want to also analyze their cash flow statements with Profitability Leverage Ratios and Liquidity Asset Turnover Ratios.
