Commercial Real Estate Finance

Posts Tagged ‘interest’

How shall I put this delicately? I have heard that sometimes, when the owner of an asset hires an expert to evaluate said asset, a potential conflict of interest can arise. The expert evaluator might, possibly be tempted to inflate the value of the asset to satisfy it’s client. I could even imagine a more aggressive owner putting a little pressure on the “expert” to inflate the value of the subject asset. While I’m not suggesting any specific person or company has ever done this, we should always be cognizant of where incentives lie. Read the rest of this entry »

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This list of Top 5 Loan Modification Myths is reproduced from the New York Real Estate Lawyer blog written by The Devery Law Group.  It is geared towards borrowers in single-family homes, but I think owners of commercial property can benefit from some of the points as well. 

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How do you know what you’re condo is worth?

Let’s say you’re long a condo unit (or more). And let’s say the only trades in your local market are distressed in nature. i.e. it’s really hard to value the unit via comps. The rental market might provide some insight.

Here’s a suggested methodology.

Years ago, before the world went mad, I learned how to gauge if a tenant could afford to rent an apartment. I learned that rent shouldn’t be more than 1/3 of a person’s pre-tax salary. The same rule of thumb, I learned, could be applied to a home and the mortgage payment. Given a market rent, you can back into the theoretical value of the unit.

Here’s an example using three theoretical apartments.

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