Non-Recourse Financing

Typically when a lender makes a loan on a real estate asset, they ask the borrower to personally guarantee the debt. This is know as "recourse" financing. This means that the borrower's personal assets are at risk if they are unable to meet the debt service and the property is foreclosed on. This is the most common type [...]

What Is Debt Service Coverage Ratio (DSCR)

When analyzing levered (properties you acquire using debt) assets, one of the most important metrics to look at it something known as Debt Service Coverage Ratio. Debt Service Coverage Ratio (DSCR) is a ratio that tells you how much debt you need to service, compared to how much net operating income you are taking in. Typically the higher [...]

Are the Numbers Real

When you're making an offer on a property, you're usually working off of numbers provided by the seller and/or seller's broker. Doesn't this seem a little strange? A party with the complete opposite interest of yours is providing you with ALL of the data that you will base your potential offer to purchase on. I'm not [...]

Giving a Break for Term

One of the most crucial valuation components to a piece of commercial real estate is the term left on the current tenancy's leases. It's a simple equation: Longer Terms = Higher Valuation While keeping a properties net operating income (NOI) as high as possible is also a major contributor to the valuation of a property, sometimes [...]

Creating Accurate Financial Models

When we know that we have a good chance of acquiring an asset, one of the first things we like to do is put together an accurate financial model on the property. These models give us a good idea of what kind of cash flow and value we can project from a particular asset over a [...]