1 / 16

Real Estate Finance

Real Estate Finance. ROI!, DSC!, LTC!, LTV! NOI! EBITDA! EMPIRICA! What Really Matters?. How do I finance real estate?. Good credit Cash Flow Collateral. Good Credit. You are already determining this! Credit Cards, Cell Phones, Utilities, Car Loans, Insurance

frederique
Download Presentation

Real Estate Finance

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Real Estate Finance ROI!, DSC!, LTC!, LTV! NOI! EBITDA! EMPIRICA! What Really Matters?

  2. How do I finance real estate? • Good credit • Cash Flow • Collateral

  3. Good Credit • You are already determining this! Credit Cards, Cell Phones, Utilities, Car Loans, Insurance • All this leads to your EMPIRICA score.

  4. EMPIRICA • 720 and up is golden • 680 to 720 is acceptable for secured transaction • Below 680 is doubtful • Automation is coming.

  5. The banks outlook on credit score • The bank lives for a 3% return over what we pay on average for deposits. • How much risk would you take for a 3% return? • Thus 680 and higher are what we want.

  6. Collateral • Cost versus Appraised? LTC versus LTV! • Typically the lesser of the two after the proper discount has been applied.

  7. Collateral • 80% Loan to Value (LTV) • This means that the bank will loan 80% of the appraised value of a property.

  8. Collateral (Continued) • 90% Loan to Cost (LTC) • This means the bank will loan 90% of the cost of a property.

  9. Variations in Discounting • Farmland • Hotels • Special Use Properties • Labs • Hospitals • Malls

  10. Relationships Matter • After all this there is a but. But relationships matter. Occasionally you will be able to get around this rule.

  11. Cash Flow

  12. Residential is so simple. • Rule of thumb for expenses is 35% of gross rents. • Coverage of 1.2 can vary if it is a higher risk more coverage may be needed. • Go to BSI 300 model.

  13. Commercial Cash Flows • This area has much more variation! • There are no rules! • There are no set rates! • Go to STI Springfield Model.

  14. Bringing it altogether. • Go to 21 Jones Drive Model

  15. Loan Types • Secondary Market • Commercial Loans • 504 Loans • Seller Financing

  16. Loan Documents

More Related