All Forum Posts by: Kevin Young

Hands down, the CCIM 101 Commercial Investment Real Estate class is the best I've seen to learn commercial real estate analytics. The class covers a variety of property types and MF is included in the mix. (its not exclusive to MF). I found this as a benefit, especially when I expanded beyond MF into triple net Retail.

The 101 course is 100% numbers/analysis focused, the class size is small (e.g., 25 ppl or so in my 101-104 classes), you work through case studies in groups, and you'll spend a week with others who do commercial real estate for a living. (read: good ppl to connect with). I'm not a broker, so this was a good way for me to connect with commercial brokers, some of whom I stay in contact with.

Coming out of this class you will know as much, and in a lot of cases, more then some of the commercial brokers. Understanding the math, the language, etc will bring you credibility with your lenders and with commercial brokers. At least, that's been my experience.

The 101 class is 5 days long ... a commitment, but worth your time IMHO. I think CCIM has on-line version too, so an option if you prefer learning online. I learn best by interacting while discussing the case studies...so I have a bias towards classroom training.

I've taken the entire series of CCIM classes and think the 101 was the best, in particular, because of its focus on analysis and understanding your numbers. Commercial real estate is about the numbers.

Here's a link to find a course near you. (I did 2 of my classes in Hawaii...so wrote off 2 vacations ;-)

http://www.ccim.com/course/catalog?page=2

If you are a CCIM member, the classes are $1300. I think its a fair price. There is no up-selling, no 500 people boot camps, and everyone there is serious about commercial real estate. The 101 class has has some rigor and I found all of the CCIM instructors to be top notch, supportive, and helpful. You take an (open book) test at the end on the last day.

Feel free to PM me if you would like to chat more about my experience with the classes.

hi anna! you're brave to rent in SF... i love living in the city, but fear the rental ordances ;-) i have some MF in the ebay and invested in some retail near sac. would love to connect up. there are deals, just slim pickings...

hi Josh, looks like you got some good advice above.

i wanted to comment on my experience with out of state section 8 ... knowing what I know now ... proceed with caution.

i'd start with having a rock solid property management company selected BEFORE purchasing a management intensive property. for me, i'd only take PM recommendations from other seasoned investors in the area who have a 'like' tenant base and 'like' sized properties to what you're about to buy.

my partner, who managed our property, put in a LOT of work each month chasing people to pay. we always collected, but the amount of effort it took to get people to pay the small fraction for which they where responsible was ridicules. section 8 mentality is something you should understand before buying a building positioned for that tenant base.

all this said, we were able to get above market rents with section 8 ...but we worked for it ;-) check with the local section 8 office to see how much they pay so you have a benchmark.

i'd underwrite this one conservatively. I also have a rule to never buy on proforma (hope) numbers and completely agree with joel's advice on the financials.

go in eyes wide open ...

welcome @Andrew Fingado!

i'm a commercial property investor and invest in richmond. lets connect up some time ... i'd be interested in hearing your ideas on property management and i'd be happy to share mine on getting started with commercial.

cheer!

looking forward to meeting everyone.

In State / Out of State?

i own multi-family in the ebay and oahu hi. also invested in single and multi-tennant retail in ca and land in wisconsin.

Strategy?
buy and hold commercial multifamily in non rent control EB cites.

Type of properties?
prefer smaller MF 8-20 units.

Looking for?
off market value add commercial properties.

Can offer / knowledgeable about?

knowledgable on all aspects of multifamily commercial properties (purchase, manage, disposition, etc.) i have a strong financial analysis background.

@Account Closed just catching up on BP and came across your thread ... just sent you my contact info.

Sam Ven, I self manage my smaller apartments and use buildium I research many of the other solutions and this seemed to be the most comprehensive for the money. there is a web portal you can customize for your properties, where prospective tenants can complete their application on line, from which you can initiate a criminal background check and credit check. it spits out a nice looking web ad for craigslist, which i like. the system is pretty robust and there's more features then i really need ... which you can check out on their site.

Chris O'brien, the best universal advice i've heard came from steve jobs' 2005 commencement address ... he shares 3 stories which apply to any profession ... be it working in high tech, an hourly gig at starbucks, or investing in real estate.

below is the youtube link or google "Steve Jobs Stanford Commencement Speech 2005". Its worth listening too. (this is not a pitch for stanford ... i didn't go there ... couldn't afford it at the time ;-)

http://www.youtube.com/watch?v=D1R-jKKp3NA

having been on the hiring side of a corporate desk for some time, i'd encourage you to work for a few years before getting an MBA ... an MBA will get you in the door, but doesn't equal easy street...nor is it the panacea. for what its worth, i'd hire an undergrad with some experience who is highly driven, genuinely passionate about what he or she does, and has a solid sense of themselves and aptitude vs. someone with an MBA from a top school who is 'just applying for a job'.

in a previously life, i was a career counselor ... happy to chat off line if you'd like. you may PM me to talk.

Eric Claxton, to avoid point 1, I agree with Jeff that private money may be the way to go. I'd recommend first consulting with a securities attorney before pooling money from a group of people. The SEC heavily regulates this area and there are a lot of rules and regulations ... not a DIY thing. PM me if you would like a few referrals.

Ben Nelson I recommend first determining what type of return you expect, and from there, back into an offer based on income and actual expenses. a 20% discount may make it a great deal or no deal at all. Only analysis can guide you.

I’d offer based on rent income for 1 BRs. If you can convert later into 2 BRs and get higher rent, then that’s all icing on the cake.

You may need to do some homework to understand how expenses run in your area … in some areas of the country i.e., Hawaii has the lowest RE taxes in the Union, my buildings there run at 37% expense ratio vs TX, where I’ve owned buildings at a 55% expense ratio …so the 50% rule of thumb is just that, a starting point, not the end all be all.

Regarding your question regarding what numbers you should look at to crunch … I’m a big fan of the CCIM templates and use them to underwrite all of my deals. They do a good job out outlining the line item expenses. It goes without saying, the analysis the template spits out is only as good as the inputs, so be realistic with your inputs.

You can download the templates at garytarp dot com/forms

I personally use this template -> CCIM Business Forms, 5 year forecast. (Excel)(US), Highlighted.

I look at my cash on cash return and if comparing a few different properties, IRR to see which one gives the best overall return. The template doesn't calculate cash on cash return, but its easy to add an additional line in the template and input the calcs.

While the template was built for commercial real estate, it works just as well for residential <5 units. What it doesn’t factor in for residential are neighborhood comps, which can drive the price of 2-4 unit buildings in ways we don’t see as much with commercial.

If you want to learn RE financials to a pretty deep level, I recommend the CCIM 100/101 courses. solid non guru education.