All Forum Posts by: Alex Mao

@S Cutsail

CCIM (Certified Commercial Investment Manager) designation is one of the most reputable in the industry.

The focus is on deal structure, analysis (market and financial) , and strategy.

You won't be disappointed.

@Gary Thompson

Hey Gary, you've gotten some good advice here but I'll offer a slightly different perspective.

I started off as an accounting clerk at a RE investment company, then shifted into their property/ project management division as an administrator. I then advanced into an analyst type role sourcing and underwriting deals and existing investments, then eventually progressed into portfolio/asset management.

I can tell you that nothing prepared me more for my analyst position than having the property management foundation. What set me apart from my peers was the hands on knowledge I had gained managing commercial buildings. It made my assumptions that much more accurate and detailed. Most other analysts gather data and go through a longer learning curve vetting what's generic in a market and what's specific to the asset being evaluated.

Long response short, if you went the PM route you won't regret it. And who knows, it may open up doors you didn't even know were available.

@Kalen Jordan

Bumping Kalen's post. Has anyone had good or bad firsthand experience with Renter's Warehouse?

Kalen, have you made any progress with PMs in the meantime?

Thanks!

@Danial Wilson

I wouldn't call that a mistake I'd call that an oopsies.

I've made several REI mistakes this year. The common thread in them is me having too much complacent confidence on those contracted on my behalf.

@Chris Martino

Lots of good perspectives offered here.

I'd look into Argus courses and certification. The Argus DCF (discounted cash flow) certification only takes a week and was one of the best and most useful courses in my career.

Also look into CCIM courses which focus on underwriting and investment analysis for commercial property. A CCIM designation is one of the most prestigious and respected in the commercial real estate industry.

Sorry, just realized all the typos...

While there may be valid suspicion on in place rents *being* below market, that also serves as a benefit in that commercial properties are *valued* by cap rates on existing rent. So unless there are other factors that prohibit achieving market rents, that may be a value add play.

@Ankur M.

While there may be valid suspicion on in place rents getting below market, that also serves as a benefit in that commercial properties are called by cap rates on existing rent. So unless there are other factors that prohibit achieving market rents, that may be a value add play.

When you underwrite this deal make sure you account for the remaining lease term at these lower rates. Since the terms commenced in 2017, and assuming these leases run 5-10 years in length, you won't be able to raise rents to market (if indeed "market" is higher for you building) until 2022, 2024, or 2027, for instance. Also check if the rent escalations are 3% annually, per CPI, flat, etc.

Whatever the case it's imperative you thoroughly analyze each lease during due diligence and obtain signed estoppels for each tenant that are consistent with seller's conveyed info.

@Reid Frohlich

I've shopped around a lot and found that, at least in AL and KS, the most competitive rates were with American Modern and State Farm (the latter was a bit surprising). There are a lot of investors here who find NREIG competitive. They weren't the most for me.

But of course rates can vary drastically by broker for same home, same insurer, so shop around.

@Ankur M.

Oh and check that taxes won't be reassessed to the higher purchase price. In CA, for commercial properties, it isn't uncommon to receive supplement taxes a year or longer after the transaction. That could be significant and a deal breaker if not accounted for.

@Ankur M.

As @Nathan G. notes, there are several important factors that you should consider and underwrite in your analysis. Creditworthiness of tenants, recovery of expenses, and length of remaining term are some others to consider.

Of course, market factors are just as crucial and diligence should be exercised in that regard as well. Unless you're able to transact this deal on your behalf, I'd work with a good broker to gather comps and market data to support your decision making.

Good luck!