Commercial Real Estate Investments For Investors & Residential RE Agents
Classes and financial models
Why Commercial RE Academy?
- We believe that Many Investors & Residential Agents need to acquire the essential knowledge to either Invest or Practice Commercial real estate.
- Our Curriculum is a MUST needed “Steppingstone” for potential Higher CRE Education
Commercial RE Academy
- Educational Curriculum
- Consulting:
- Preparation of Syndications’ Business Cases
- Developing Investment Summary Reports
- Help with Specific Transactions
Comprehensive Commercial RE From the Foundations to the Syndications
comprehensive video coming soon
1. Review of Fundamentals of CRE
A. Terminology
B. Valuations (Cap Rate – GRM)
C. Cash Flow (Before and After Tax)
D. Return on Investment Calculations
E. A Quick Visit to Internal Rate of Return (IRR)
2. Preparing an Offering Memorandum for Commercial RE Property
A. Industry’s Most Common Forms of Memorandum
B. Free Commercial Websites you can get data from.
C. Compiling & Finalize Full Prospectus using Software tools
D. ProForma Analysis & Presentations
E. How to use the same Prospectus to Secure Listings
3. Property Management Aspects in Multi-Family
A. Management Roles
B. Marketing and Leasing
C. Collection Issues and Guidelines
D. Maintenance, Reporting & Performance
E. Property Management Software
4. Introduction to Financial Models & Tools for Investment Evaluation
A. The Class Standard Model for Evaluating Investments (Free for Attendees)
B. Scenarios for Evaluations:
1. Set ROI to Calculate Purchase Price
2. Set Purchase (Asking) Price and NOI to Calculate Actual Cap Rates
3. Adjusting Operating Expenses and DCR for Loan Qualifications.
4. “Fine-Tuning” the alternative scenarios
5. Case Study: Multi Family / Mixed Use
Evaluating the Potential Upside
Identifying Deferred Maintenance and Repairs
Strategizing the “Turn-around” Plan
Calculating Final increases in Equity and Cash Flow
6. National Commercial RE Institutions: Websites & Information Sources
A. Building Owners and Managers Association (BOMA)
B. International Council of Shopping Centers (ICSC)
C. National Association of Industrial and Office Properties (NAIOP)
D. National Multi Housing Council (NMHC)
E. Other Related Resources
7. Investment Groups and Syndications (The Business Side)
A. The Broad Definition of Syndications
B. Forms of Group Investments
C. Advantages and Disadvantages to Investors
D. Sources of Compensations to the Sponsor (Syndicator)
8. Syndications Case Study (3-Year Sample)
A. Setting- up the Presentation
B. Allocation of Profits
C. Estimating total Return to Investors
D. Estimating Return to Sponsors
9. Tax-Deferrals and Rules of Exchanges
A. Calculating Gain
B. The Pros and Cons of 1031 Exchanges
C. The Exchange Equation
D. Reverse Exchanges
(Outside Speaker)
Comprehensive Commercial RE From the Foundations to the Syndications
comprehensive video coming soon
Section 1
Introduction to Commercial Real Estate Properties
Duration: 30 Minutes
| Topics | Time Allocated |
|---|---|
| Types of CRE Properties | 5 min |
| Commercial RE & Residential Clients | 4 min |
| What is Common between CRE Properties | 6 min |
| Benefits of Investing in CRE Properties | 15 min |
- Takeaways
- Review Q/A
Section 2
Typical Sources of Income & Expenses in M/F Properties
Duration: 12 Minutes
| Topics | Time Allocated |
|---|---|
| Sources of Income | 8 min |
| Operating Expenses | 4 min |
- Takeaways
- Review Q/A
Section 3
Simple Calculation on M/F Properties
Duration: 36 Minutes
| Topics | Time Allocated |
|---|---|
| Important Definitions | 11 min |
| Calculating the ROI | 9 min |
| DSCR | 5 min |
| CAP Rate | 4 min |
| IRR | 7 min |
- Takeaways
- Review Q/A
Section 4
Valuation of CRE Properties
Duration: 27 Minutes
| Topics | Time Allocated |
|---|---|
| Methods of Valuation | 14 min |
| Markets & Submarkets | 8 min |
| Identifying CRE Investment Opportunities | 3 min |
| Absorption | 2 min |
- Takeaways
- Review Q/A
Section 5
Valuation of CRE Properties
Duration: 27 Minutes
| Topics | Time Allocated |
|---|---|
| Methods of Valuation | 14 min |
| Markets & Submarkets | 8 min |
| Identifying CRE Investment Opportunities | 3 min |
| Absorption | 2 min |
- Takeaways
- Review Q/A
Section 6
Tax Consideration in CRE Investments
Duration: 18 Minutes
| Topics | Time Allocated |
|---|---|
| Our Existing Tax System | 5 min |
| Depreciation Defined | 2 min |
| Calculating After Tax – Cash Flow | 4 min |
| Rules of Exchange (1031) | 7 min |
- Takeaways
- Review Q/A
Section 7
Preparing Offering Memorandum
Duration: 30 Minutes
| Topics | Time Allocated |
|---|---|
| The Role of O/M | 4 min |
| Valuation vs. Presentation | 3 min |
| Executive Summary | 4 min |
| Comprehensive O/M | 18 min |
- Takeaways
- Review Q/A
Section 8
Understanding Real Estate Syndications
Duration: 50 Minutes
| Topics | Time Allocated |
|---|---|
| Introduction to Syndications | 5 min |
| Structure of Syndications | 10 min |
| Benefits to Investors | 6 min |
| What Syndicators Typically Charge | 4 min |
| Guidelines for Evaluating Syndications | 7 min |
| Do’s and Don’ts for Syndicators | 18 min |
- Takeaways
- Review Q/A
PAST COURSES
Overview of Commercial RE for Investors & Residential Agents
1 Day Class
1. Commercial RE Terminology & Formulas
A. Types of Commercial RE
B. Some important definitions
C. Income & Expense Sources
D. Simple calculations in investment properties
E. The Concept of Leverage
2. Methods of Valuations
A. Gross Rent Multiplier
B. Capitalization Rate
C. Market Analysis
D. Vacancy Rate Calculations
E. Comparable Analysis
F. Market Surveys
3. Some Tax Considerations in Commercial RE Investments
A. Depreciation
B. After Tax Calculations
C. Sheltering Passive Income
4. Case Study: Multi Family
A. Optimizing Performance of a typical “miss-managed” property.
B. Net Increase in Cash Flow
C. Net Increase in Equity
5. Overview of Syndications
(The Business Side)
A. The Broad Definition of Syndications
B. Form of Group Investments
C. Advantages and Disadvantages to Investors
D. Sources of Compensations to the Sponsor (Syndicator)
E. Forecasting the return to Investors
F. Simple Example of a small syndication
Advanced Topics in Commercial RE Practice
3 Day Boot Camp
1. Overview of Commercial R.E. Investments
A. Types of Commercial RE
B. Income/Expense sources in CRE properties
C. CRE Products (Office, Multifamily, Retail & Industrial)
D. Some important definitions & acceptable Ratios
E. Benefits of Investing in CRE properties
2. Valuation Methods of C. R.E. Investments
A. The Gross Rent Multiplier Approach
B. The Capitalization Rate Approach
C. Simple calculations in CRE Investments
3. Return on Investment Formulas & Calculations
A. Cash Flow vs. Leverage.
B. The 3-Stages of the Investment Cycle
C. A Comprehensive Commercial R.E. Model
D. Cash Flow, COC & Equity build-up
E. Internal Rate of Return
4. Marketing Prospectus & Offering Memorandum (O/M)
A. Presentation vs. Evaluation
B. The Market Analysis.
C. Analyzing Market Trends
D. Pro-Forma & Developing Projections.
E. Step -by- Step in building O/M
5. Property Management Aspects & Software Tools
A. General concepts of Property Management.
B. Management Roles.
C. Marketing, Leasing, Collection & Reporting
D. Deferred Maintenance Issues.
E. Performance Issues vs. Management Plan.
6. A Comprehensive Example of Multifamily / Mixed Use Project
7. After-Tax Cash Flow Calculations
A. Depreciation Rules & Sheltering Guidelines
B. Impact of Tax Reform Act of 1986
C. Taxable Income & Computing After Tax Cash Flow
8. Investment Opportunities in CRE
A. Distressed Properties
B. Re-positioning of an Asset
C. “Turn-around” Considerations
D. Deferred Maintenance
E. Capital Projects & Reserves
F. Building an Operating History
9. Forms of Investment Groups & Syndications
(This Segment will address the Business-Side only for Syndications. Legal & Regulatory side may be addressed by a Syndications lawyer)
A. Definitions; Group Investments and Sponsors
B. Most Common Formats of Syndications
C. Duties and Compensations of Group Sponsor
D. Formats and functions of an Investment Fund
10. Case Study Two
A. Financial Projections for a potential 7-Year Syndication
B. Discussion of various approaches in compensating a Syndicator.
C. Details the “Exceeding Expectation” by Sponsor / Syndicator
D. How to identify potential suitable investments for Syndications.
11. Advanced Financial Models
A. Modeling Software & Investment Presentations.
B. Various uses of Financial Models in Selecting Investment Properties.
C. Building “Side-by-Side” Actual and ProForma Tables
12. Tax-Deferrals and Rules of Exchanges
A. Calculating Gain
B. The Pros and Cons of 1031 Exchanges
C. The Exchange Equation
D. Reverse Exchanges
(Outside Speaker)
