fundamentals of investing & financial concepts - … · #apartmentalize #apartmentalize...
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Fundamentals of Investing & Financial Concepts Wednesday, June 13, 2018 1:45 PM - 2:45 PM
Sponsored by
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Meet the Expert
Chuck SheldonPresident, CEO, QBT & C Management, LLC
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Do investors own commercial real estate?
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Goals for Today:• Discover major investment benchmarks
GRM (Gross Rent Multiplier) CAP Rate (Capitalization rate) Cash on Cash IRR unleveraged IRR with leverage IRR after tax
• Look at real estate the same way investors, wall street, lenders, and capital markets• Understand the relationship between risk and return• Match investor needs with deal parameters
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What Does IRR Mean to You?1. Cash on Cash Return2. Equity3. ROI4. Total Return5. Annual Return
Polling Question
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Major Benchmarks for Measuring Investment Real Estate
• GRM (Price / Annual Rents)• CAP Rate (NOI / Price)• Cash on Cash (CBFT / Down payment)• IRR (NPV)• Effective Tax Rate• Better than stock market (cash on cash and leverage)• Cash flow (vs. other investments)• Depreciation / Tax Benefits• Principle reduction on Loan• Appreciation
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What Do We Tell Our Clients?Why Should They Own Investment Real Estate?
• Cash Flow• Potential for Appreciation • Tax Benefits
Leveraged Benefit Leveraged Tax Benefit
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Using the APOD
The Overall Layout:• Property Descriptors• Pricing and Terms• Value Indicators• Unit Mix & Scheduled Income• Cash Flow Analysis• Assumptions• Annual Operating Expenses
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Using the APOD
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Using the APOD
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Five Years of Operations
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Five Years of Operations
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Five Years of Operations
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Five Years of Operations
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