Wealth Opportunities in Commercial Real Estate: Management, Financing, and Marketing of Investment Properties

Table of contents

1. Cover Page
2. Title Page
3. Copyright
4. Dedication
5. Contents
6. List of Abbreviations
7. Introduction
8. CHAPTER 1: An Overview of the Problem, a Solution, and a Game Plan
   1. The Problem
   2. The Solution
   3. Four Key Elements in the Solution
   4. Concerns about the Solution
   5. Acquiring the Skill Set to End the Cycle
   6. A Game Plan to Achieve the Solution
   7. This Book Is about Center B Properties
9. CHAPTER 2: The Basics
   1. Gross Income: The Starting Point
   2. Vacancy and Collection Loss: Gross Income Reducers
   3. Operating Expenses and Net Operating Income
   4. Fair Market Value and Capitalization Rate: What's It Worth?
   5. Gross Rent Multiplier
   6. Value per Square Foot versus Reproduction Cost per Square Foot
   7. Inverse Relationship between Cap Rate and FMV
   8. Initial Determination of Value
   9. Leveraged Return and Return on Equity
   10. Cash Flow before Taxes (CFBT)
   11. Reserves/Impound Accounts
   12. Taxes and Insurance Impounds
   13. Cap X, TIs, and Leasing Commissions
   14. Devil in the Details: Over Simplified Analysis
10. CHAPTER 3: Detailed Financial Analysis
    1. Gross Income
    2. Vacancy and Collection Loss
    3. Operating Expenses
    4. Four Basic Types of Leases
    5. Nonrecoverable Expenses
    6. Time-Frame Assumptions
    7. Static versus Active Analysis
    8. Compounding
    9. Rent Roll
    10. Argus Ten-Year Discounted Cash Flow Model
    11. Analysis Reflecting 100 Percent Occupancy
    12. Reversion
    13. Disposition Costs
    14. The Time Value of Money: Present Value and Discounted Cash Flow
    15. Net Present Value (NPV)
    16. Internal Rate of Return (IRR)
    17. Conclusions from Argus Analysis and the Hypothetical Facts
    18. Analysis Reflecting a Large Vacancy after Purchase
    19. Analysis Reflecting a Large Vacancy with a Tenant in Tow
11. CHAPTER 4: Lease Analysis
    1. The Importance of Basic Lease Provisions
    2. Twelve Key Economic Ingredients in a Lease
    3. Frequently Negotiated Lease Provisions
12. CHAPTER 5: Real Estate Financing
    1. Sixty to Eighty Percent of the Game
    2. Types of Financing
    3. What Is the Right Answer to Debt Structuring?
    4. Seven Key Factors to Consider in a Real Estate Loan
    5. Loan Underwriting
    6. Cash-on-Cash Return
    7. The Mortgage Loan Application
    8. The Pitfalls of Mortgage Lending
    9. Negotiable Points of a Loan
13. CHAPTER 6: Real Estate Taxation
    1. Income Taxation
    2. Real Property Taxation
    3. Taxation in the Event of a Refinance
    4. Taxation in the Event of a Sale
    5. Installment Sale
    6. Section 1031 Exchange
14. CHAPTER 7: Acquisitions and Dispositions
    1. Focus on Specific Property Types in Specific Geographic Locations
    2. Establish Buying Criteria
    3. Acquisition Philosophy
    4. Governmental Impact
    5. Initial Screening
    6. The Purchase and Sale Agreement
    7. Building a Team
    8. Due Diligence
    9. Dispositions
15. CHAPTER 8: Case Studies
    1. Problem Number 1
    2. Problem Number 2
    3. Problem Number 3
    4. Problem Number 4
    5. Problem Number 5
    6. Problem Number 6
    7. Problem Number 7
16. CHAPTER 9: Development or Rehabilitation (Build to a 12 Percent Yield)
    1. The 10 Phases of a Construction or Rehab Project
    2. Assessing a Construction Project
    3. Developer as Conductor
    4. Does the Project Hit Your Minimum Yield?
    5. Argus Developer
    6. Feasibility or Market Study
    7. The Composition of a Feasibility Study
    8. Residual Land Value
    9. Preleasing
    10. Equity and Financing
    11. Mechanics' Liens
    12. Liability under the Construction Loan
    13. Design and Construction Drawings
    14. Governmental Approvals
    15. Covenants, Conditions, and Restrictions (CC&Rs)
    16. Ground Lease Restrictions
    17. Construction of Improvements in a Ground-Up Development
    18. Inspections
    19. Insurance
    20. Decisions, Decisions, Decisions
    21. Communication, Communication, Communication
    22. Graphic Time Line
    23. Project Operating Costs
    24. Lender's Disbursement Form
    25. Change Orders
    26. Rehabilitation Project
    27. Construction of Improvements in a Rehab Project: Decisions, Decisions, Decisions
    28. Rehab Project: Communication, Communication, Communication
    29. Summary
17. CHAPTER 10: Marketing, Leasing, and Management
    1. Definition of Marketing, Leasing, and Management
    2. Marketing
    3. Leasing
    4. Strategy
    5. Management
    6. Management as a Business
    7. Conclusion
18. CHAPTER 11: Partnership Structuring and Deal Restructuring
    1. Partnership Structuring
    2. Securities Issues
    3. Fifteen Key Structuring Issues
    4. Debt Restructuring
    5. Borrower's Proposed Terms
    6. Lender's Counterproposal
19. CHAPTER 12: Keeping the Money
    1. Planning
    2. Fractional Interests
    3. Estate Planning Checklist
20. Acknowledgments
21. About the Website
22. About the Author
23. Index