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Library | Item Barcode | Call Number | Material Type | Item Category 1 | Status |
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Searching... | 30000010293799 | HD1393.55 G73 2012 | Open Access Book | Book | Searching... |
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Summary
Summary
ESSENTIAL COVERGAGE OF THE COMMERICAL REAL ESTATE MARKET AND HOW TO MAKE IT WORK FOR YOU
The one-stop guide to making money from buying, managing, and owning commercial real estate, Wealth Opportunities in commercial real Estate is the comprehensive resource you need in order to take full advantage of the market, whether you're just starting out or an old hand. Including industry case studies and expert advice from real estate expert Gary Grabel, the book teaches you the fundamentals-including how to evaluate a potential property and how to create value even before you buy-that other books leave out. Commercial real estate investing is an excellent, and highly profitable, investment choice for those with the right perspective and the patience to see their decision through. But to really succeed, it is essential to have a firm grasp of the basics of the real estate game before you get started. if you think you're ready, then this book is your first step.
Author Notes
GARY GRABEL is the Managing Director of Ethan Christopher, LLC, the holding company for his real estate activities. The company specializes in value-added real estate with a focus on retail centers and medical office buildings. Ethan Christopher currently owns and manages over one million square feet of real estate in California, Arizona, and Texas. Mr. Grabel brings to this text his extensive practical experience as an owner/operator of commercial real estate. For over thirty years, he has been involved in all aspects of commercial real estate including financing, leasing, acquisitions, and the day-to-day running of a real estate portfolio. Mr. Grabel is a real estate broker, a member of the California bar association, and a frequent lecturer on real estate-related topics.
Table of Contents
| List of Abbreviations | p. xiii |
| Introduction | p. xv |
| Chapter 1 An Overview of the Problem, a Solution, and a Game Plan | p. 1 |
| The Problem | p. 1 |
| The Solution | p. 2 |
| Four Key Elements in the Solution | p. 3 |
| Concerns about the Solution | p. 8 |
| Acquiring the Skill Set to End the Cycle | p. 9 |
| A Game Plan to Achieve the Solution | p. 9 |
| This Book Is about Center B Properties | p. 18 |
| Chapter 2 The Basics | p. 21 |
| Gross Income: The Starting Point | p. 21 |
| Vacancy and Collection Loss: Gross Income Reducers | p. 21 |
| Operating Expenses and Net Operating Income | p. 23 |
| Fair Market Value and Capitalization Rate: What's It Worth? | p. 24 |
| Gross Rent Multiplier | p. 25 |
| Value per Square Foot versus Reproduction Cost per Square Foot | p. 26 |
| Inverse Relationship between Cap Rate and FMV | p. 29 |
| Initial Determination of Value | p. 29 |
| Leveraged Return and Return on Equity | p. 30 |
| Cash Flow before Taxes (CFBT) | p. 32 |
| Reserves/Impound Accounts | p. 32 |
| Taxes and Insurance Impounds | p. 32 |
| Cap X, TIs, and Leasing Commissions | p. 33 |
| Devil in the Details: Over Simplified Analysis | p. 38 |
| Chapter 3 Detailed Financial Analysis | p. 41 |
| Gross Income | p. 41 |
| Vacancy and Collection Loss | p. 43 |
| Operating Expenses | p. 43 |
| Four Basic Types of Leases | p. 46 |
| Nonrecoverable Expenses | p. 55 |
| Time-Frame Assumptions | p. 56 |
| Static versus Active Analysis | p. 57 |
| Compounding | p. 58 |
| Rent Roll | p. 59 |
| Argus Ten-Year Discounted Cash Flow Model | p. 60 |
| Analysis Reflecting 100 Percent Occupancy | p. 65 |
| Reversion | p. 66 |
| Disposition Costs | p. 66 |
| The Time Value of Money: Present Value and Discounted Cash Flow | p. 67 |
| Net Present Value (NPV) | p. 68 |
| Internal Rate of Return (IRR) | p. 68 |
| Conclusions from Argus Analysis and the Hypothetical Facts | p. 69 |
| Analysis Reflecting a Large Vacancy after Purchase | p. 70 |
| Analysis Reflecting a Large Vacancy with a Tenant in Tow | p. 72 |
| Chapter 4 Lease Analysis | p. 75 |
| The Importance of Basic Lease Provisions | p. 75 |
| Twelve Key Economic Ingredients in a Lease | p. 77 |
| Frequently Negotiated Lease Provisions | p. 96 |
| Chapter 5 Real Estate Financing | p. 119 |
| Sixty to Eighty Percent of the Game | p. 119 |
| Types of Financing | p. 120 |
| What Is the Right Answer to Debt Structuring? | p. 122 |
| Seven Key Factors to Consider in a Real Estate Loan | p. 124 |
| Loan Underwriting | p. 131 |
| Cash-on-Cash Return | p. 137 |
| The Mortgage Loan Application | p. 138 |
| The Pitfalls of Mortgage Lending | p. 138 |
| Negotiable Points of a Loan | p. 153 |
| Chapter 6 Real Estate Taxation | p. 157 |
| Income Taxation | p. 157 |
| Real Property Taxation | p. 163 |
| Taxation in the Event of a Refinance | p. 164 |
| Taxation in the Event of a Sale | p. 165 |
| Installment Sale | p. 166 |
| Section 1031 Exchange | p. 168 |
| Chapter 7 Acquisitions and Dispositions | p. 179 |
| Focus on Specific Property Types in Specific Geographic Locations | p. 179 |
| Establish Buying Criteria | p. 181 |
| Acquisition Philosophy | p. 181 |
| Governmental Impact | p. 182 |
| Initial Screening | p. 183 |
| The Purchase and Sale Agreement | p. 187 |
| Building a Team | p. 199 |
| Due Diligence | p. 199 |
| Dispositions | p. 206 |
| Chapter 8 Case Studies | p. 219 |
| Problem Number 1 | p. 219 |
| Problem Number 2 | p. 230 |
| Problem Number 3 | p. 242 |
| Problem Number 4 | p. 244 |
| Problem Number 5 | p. 248 |
| Problem Number 6 | p. 255 |
| Problem Number 7 | p. 258 |
| Chapter 9 Development or Rehabilitation (Build to a 12 Percent Yield) | p. 269 |
| The 10 Phases of a Construction or Rehab Project | p. 269 |
| Assessing a Construction Project | p. 270 |
| Developer as Conductor | p. 272 |
| Does the Project Hit Your Minimum Yield? | p. 274 |
| Argus Developer | p. 279 |
| Feasibility or Market Study | p. 283 |
| The Composition of a Feasibility Study | p. 284 |
| Residual Land Value | p. 285 |
| Preleasing | p. 286 |
| Equity and Financing | p. 287 |
| Mechanics' Liens | p. 287 |
| Liability under the Construction Loan | p. 288 |
| Design and Construction Drawings | p. 289 |
| Governmental Approvals | p. 290 |
| Covenants, Conditions, and Restrictions (CC&Rs) | p. 291 |
| Ground Lease Restrictions | p. 292 |
| Construction of improvements in a Ground-Up Development | p. 292 |
| Inspections | p. 295 |
| Insurance | p. 296 |
| Decisions, Decisions, Decisions | p. 296 |
| Communication, Communication, Communication | p. 298 |
| Graphic Time Line | p. 299 |
| Project Operating Costs | p. 302 |
| Lender's Disbursement Form | p. 303 |
| Change Orders | p. 303 |
| Rehabilitation Project | p. 303 |
| Construction of Improvements in a Rehab Project: Decisions, Decisions, Decisions | p. 311 |
| Rehab Project: Communication, Communication, Communication | p. 311 |
| Summary | p. 311 |
| Chapter 10 Marketing, Leasing, and Management | p. 313 |
| Definition of Marketing, Leasing, and Management | p. 313 |
| Marketing | p. 314 |
| Leasing | p. 319 |
| Strategy | p. 319 |
| Management | p. 345 |
| Management as a Business | p. 353 |
| Conclusion | p. 354 |
| Chapter 11 Partnership Structuring and Deal Restructuring | p. 355 |
| Partnership Structuring | p. 355 |
| Securities Issues | p. 357 |
| Fifteen Key Structuring Issues | p. 351 |
| Debt Restructuring | p. 371 |
| Borrower's Proposed Terms | p. 383 |
| Lender's Counterproposal | p. 384 |
| Chapter 12 Keeping the Money | p. 389 |
| Planning | p. 339 |
| Fractional Interests | p. 396 |
| Estate Planning Checklist | p. 400 |
| Acknowledgments | p. 433 |
| About the Website | p. 405 |
| About the Author | p. 497 |
| Index | p. 409 |
