[Verse 1] Picture a building on Fifth Avenue Rental income streaming through But what's it worth in today's money When tomorrow's cash feels funny We need a crystal ball of math To map the property's true path [Chorus] DCF - Discounted Cash Flow Project the future, then bring it low Back to present value's door That's what this method's designed for Future dollars shrink in time Discount rates help realign DCF makes real estate shine [Verse 2] Start with rental income each year Add the growth rates crystal clear Subtract expenses, taxes too Operating cash comes into view Terminal value at the end When you plan to sell, my friend [Chorus] DCF - Discounted Cash Flow Project the future, then bring it low Back to present value's door That's what this method's designed for Future dollars shrink in time Discount rates help realign DCF makes real estate shine [Bridge] Discount rate reflects the risk Higher risk means steeper whisk Ten percent or eight or twelve Choose the rate that serves you well Divide each year by one plus rate Raised to power - don't be late Sum them up and there you go Present value starts to show [Verse 3] Year one cash divided by One point one to the first try Year two needs one point one squared Year three's exponentially prepared Each future dollar worth much less Present value's the address [Chorus] DCF - Discounted Cash Flow Project the future, then bring it low Back to present value's door That's what this method's designed for Future dollars shrink in time Discount rates help realign DCF makes real estate shine [Outro] When properties call your name DCF will stake your claim Future cash flows tell the tale Present value tips the scale
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