Please correct me if I'm wrong.
So the AFFO (total of 4 fiscal quarters) if I'm understanding this correctly, when evaluating a REIT, is the ACTUAL net cash income annually. Since it factors back in depreciation which isnt a realized expense and then subtracts capital expenses to maintain the portfolio, the result is what the actual net income in cash hitting the bank account truly is?
So can I essentially take the annual AFFO divided by the total outstanding shares to get an AFFO per share and then use that, assuming I like the sector and comfortable with a REITs leverage to determjne a cash on cash return? Similar to what Buffets value investing based on net income of a company is.
I just feel like I'm not grasping this as well as I could/should and I need a better understanding to have confidence in picking REITs at particular prices.
Thanks for your assistance.
Submitted February 07, 2017 at 03:08PM by ElscottHavoc http://ift.tt/2koAUfw
