“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ . ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me firstname.lastname@example.org. …. VIEW ALL OF WALTERS LISTINGS. Let me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE
Commercial real estate investing is all about numbers. In order to evaluate and analyze a commercial real estate investment, you need to know a few important numbers, what they’re called, and how to figure them. Having these terms under your belt is crucial on two fronts:
- Most likely, you’ll use a real estate broker to help you locate and close the deal. Real estate brokers know and use most of the terms mentioned here. If you can speak their language, you gain instant credibility and a relationship advantage over someone without this vocabulary.
- Just by increasing your word power, you gain increased confidence, which enables you to make sound, efficient investment decisions and gives you an increased ability to hold your position, especially in negotiations.
Here are the names, numbers, and equations you need to know:
- Capitalization rate: The capitalization rate is a measure of a property’s performance without considering the mortgage financing. Also known as the cap rate, it’s your net operating income divided by the sales price. Cap rates tell you how much you’d make on an investment if you paid all cash for it:
Cap rate = net operating income ÷ sales price
- Cash flow: Your annual cash flow is net operating income minus debt service. You can also figure monthly cash flow by dividing your annual cash flow by 12:
Annual cash flow = net operating income – debt service
Monthly cash flow = annual cash flow ÷ 12
- Cash-on-cash return: This is the velocity of your money — how long it takes for your down payment to come back to you. To find your cash-on-cash return,divide your annual cash flow by the down payment amount:
Cash-on-cash return = annual cash flow ÷ down payment
- Debt service: Debt service is calculated by multiplying your monthly mortgage amount by 12:
Debt service = monthly mortgage amount x 12
- Effective gross income: You can find your effective gross income by subtracting vacancy from gross income:
Effective gross income = income – (vacancy rate % x income)
- Gross income: Gross income is all of your income, including rents, laundry or vending machine income, and late fees.
- Net operating income (NOI): Your net operating income is one of the most important numbers when analyzing any deal. The NOI is the dollar amount that’s left over after you collect all your income and pay out your operating expenses. This money is used to pay the mortgage. Your NOI is your effective gross income minus operating expenses:
Net operating income = effective gross income – operating expenses
- Operating expenses: Your annual operating expenses of the property typically include taxes, insurance, utilities, management fees, payroll, landscaping, maintenance, and supplies. This category doesn’t include mortgage payments or interest expense.
- Vacancy rate: Your vacancy rate is the number of vacancies divided by the number of units:
Vacancy rate = number of vacancies ÷ number of units
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me email@example.com. …. VIEW ALL OF WALTERS LISTINGS. Let me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE
Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also internationalClick here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
PLEASE CALL ME 520-975-5207 OR E-MAIL ME firstname.lastname@example.org
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me email@example.com
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
- The average age of the population is 34 years old.
- The health cost index score in this area is 102.1. (100 = national average)
- Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
Kasten Long Commercial Group tracks all advertised apartment communities, including those advertised by other brokerages. The interactive map shows the location of each community (10+ units) and each location is color coded by the size (number of total units).
Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail firstname.lastname@example.org or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
5110 N 40th Street, Suite 110
Phoenix , AZ 85018
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The information in this blog-newsletter is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.