Commercial Multifamily Valuation
Question on commercial multifamily valuation...
When I analyze deals, I include Reserves (10%, set aside for CapEx) in the Operating Expenses, which means it is a part of my NOI calculation. That's how I do it internally to account for CapEx that will happen down the line. Is that the general way to do it? When it comes time for me to sell or refinance, are the potential buyers, bankers, etc. calculating the property value including that Reserve line in OpEx or leaving it out?
Thanks!