The more you borrow, the less your cash flow will be. If your property is in a high-risk area and exposed to flood, earthquake, and wildfire be sure to get the appropriate insurance to cover your investment. The Federal Reserve can increase the overnight interest rates driving up the cost of borrowing, and impact the overall real estate market. EV includes in its calculation the market capitalization of a company but also short-term and long-term debt as well as any cash on the company’s balance sheet.