Most Important Commercial Real Estate Terms You Must Know

Discover the most important commercial real estate terms you should know. Understanding this basic information is not only essential for analyzing every commercial investment accurately, but it also protects you from making bad decisions. Before investing in any commercial property, you must know these commercial real estate terms.
Learn more here: www.commercialpropertyadvisor...
Effective Gross Income (EGI): • How to Calculate Effec...
Total Operating Expenses: • How to Calculate Total...
Net Operating Income (NOI): • How to Calculate Net O...
Debt Coverage Ratio: • How to Calculate Debt ...
Capitalization (Cap) Rate : • How to Calculate Capit...
Cash on Cash Return: • How to Calculate Cash ...
Actual vs Pro Forma Financials: • Actual vs Pro Forma Fi...
Building and Location Class: • How to Determine Build...
0:00 Basic Commercial Real Estate Terms
0:39 Building and Location Class
1:32 Gross Rental Income (GRI)
1:59 Vacany Factor
2:46 Effective Gross Income (EGI)
3:17 Operating Expenses (OpEx)
4:17 Net Operating Income (NOI)
5:18 Annual Debt Service (ADS)
6:05 Cash Flow
6:50 Commercial Real Estate Decision Making Terms
8:20 Cash on Cash Return (ROI)
9:34 Capitalization Rate (Cap Rate)
12:22 Debt Coverage Ratio (DCR)
15:07 Bonus: Actual vs Pro Forma Explained

Пікірлер: 45

  • @CommercialPropertyAdvisors
    @CommercialPropertyAdvisors Жыл бұрын

    Every successful commercial real estate investor has a mentor. Get your mentor here: www.commercialpropertyadvisors.com/protege-protege

  • @user-ym9pn7qv5k
    @user-ym9pn7qv5k Жыл бұрын

    Hi Peter, Very informative. It’s always helpful. It’s never boring. I always go back and forth between your different videos!!!

  • @123pb
    @123pb Жыл бұрын

    I am entering into brokering commercial mortgages (apartment complexes/multi units) and find this to be an excellent way of learning how to understand the needs of my clients

  • @dhammons7449
    @dhammons7449 Жыл бұрын

    You would have to raise the rents to $1560 each apartment to get $93600

  • @pillarcloud8266
    @pillarcloud8266 Жыл бұрын

    Thank you Peter for this priceless information.

  • @user-yp7iy6sd1j
    @user-yp7iy6sd1j7 ай бұрын

    THANK YOS SO MUCH.VERY INFORMATIVE.

  • @blake8ism
    @blake8ism Жыл бұрын

    Great video.....thank GOD for you!

  • @dannygarcia7806
    @dannygarcia7806 Жыл бұрын

    Excellent information. Thank you for your valuable content 🙏

  • @twgolf2704
    @twgolf27047 ай бұрын

    Great videos sir. Very easy to understand.

  • @paulbiniasz2278
    @paulbiniasz22787 ай бұрын

    EXCELLENT PRESENTATION!

  • @losaeyang1272
    @losaeyang127210 ай бұрын

    Thanks you professor. New subscriber here.

  • @pierrefontecha
    @pierrefontecha26 күн бұрын

    Thank you so much!

  • @soloa8276
    @soloa82764 ай бұрын

    Thank you Peter.

  • @jacobhoke581
    @jacobhoke5818 ай бұрын

    This helped me so much thank you would you say the same 35% rule for operating expenses applies to non commercial relistate like a 4 plex

  • @kjwking3923
    @kjwking39232 ай бұрын

    Peter, Thanks for the info and your time Where do you account for property taxes and property insurance? Is they in the mortgage payment or in the expenses?

  • @mercurymarauder2897
    @mercurymarauder2897 Жыл бұрын

    You made a mistake on the 25% down payment is supposed be 20%down pymt, $120,000 of $600,000 equals 20%

  • @CommercialPropertyAdvisors

    @CommercialPropertyAdvisors

    Жыл бұрын

    Good catch! 20% is what I meant.

  • @robertoinvests
    @robertoinvests Жыл бұрын

    love this stuff. I love numbers!!!

  • @texas4325
    @texas4325 Жыл бұрын

    Bought your book I’m getting my first commercial property built now.

  • @dougreviewstheuniverse9082
    @dougreviewstheuniverse90823 ай бұрын

    Thanks Peter.

  • @vivianasantanarealestate8428
    @vivianasantanarealestate84285 ай бұрын

    You are amazing!! Thank you so much ❤

  • @CommercialPropertyAdvisors

    @CommercialPropertyAdvisors

    2 ай бұрын

    You're welcome 😊

  • @iycrra75
    @iycrra753 ай бұрын

    Stumbled upon your video in my feed and now I am a subscriber, and watching some of your videos. When you say 6.5% interest, is it interest only loan? I am wondering what type of loans you would recommend for Commercial Real Estate. Thanks and keep up the good work Peter!🙏

  • @CommercialPropertyAdvisors

    @CommercialPropertyAdvisors

    3 ай бұрын

    You'll really like this video, Apartment Loans 101: kzread.info/dash/bejne/ZGelsNWfcsnMeLQ.html

  • @tw2800
    @tw2800 Жыл бұрын

    Hi Peter If you did not have an annual debt service and if the property had been purchased with cash you would have a greater cash on cash return than with ADS....also there are extra loan origination fees and other fees potentially not factored in.....also the advantage of a cash purchase would probably enable a stronger negotiation for the buyer....probably a lower purchase price.....also no future problems with refinancing a loan.....so if you have cash how is it a better investment option to take on debt?

  • @jackcarter-bd4tw
    @jackcarter-bd4tw10 ай бұрын

    Very smart man

  • @user-ym3vc9xu3y
    @user-ym3vc9xu3y6 ай бұрын

    good info ! but in section (5:37) 25% of 600 k is 150,000 not 120 off by 30,000 , but still very good info

  • @ellenoir5678
    @ellenoir5678 Жыл бұрын

    Good morning Mr Harris

  • @jorgerubio2625
    @jorgerubio26254 күн бұрын

    Great professor

  • @CommercialPropertyAdvisors

    @CommercialPropertyAdvisors

    3 күн бұрын

    Thanks!

  • @eugenehammond6225
    @eugenehammond6225 Жыл бұрын

    Kool

  • @Ascension_iq
    @Ascension_iq Жыл бұрын

    💎💎

  • @eberg8630
    @eberg8630 Жыл бұрын

    Hi Peter, There is a mistake. in your proforma you have 93,600 as a result of raising the rents $50 a year. 1200 + 100 is 1300 x 5 is 6500 x 12 is 78k. So the math is a lot less inviting than you make it appear. Was this on purpose?

  • @dhammons7449
    @dhammons7449 Жыл бұрын

    When you raise the rents $100 the new gri is $78,000

  • @jerryariza6834

    @jerryariza6834

    Жыл бұрын

    at least im not the only one, i was doing the math and i thought i was crazy

  • @opktiger87

    @opktiger87

    Жыл бұрын

    Yes, I was banging my head wondering what I was doing wrong. Thx

  • @kenshofalco8326
    @kenshofalco8326 Жыл бұрын

    I definitely respect what you've accomplished Peter but I'm concerned commercial property is going to get hammered

  • @CommercialPropertyAdvisors

    @CommercialPropertyAdvisors

    Жыл бұрын

    Define "commercial" property. Define "hammered".

  • @Earth_to_Kensho...ComeInKensho

    @Earth_to_Kensho...ComeInKensho

    Жыл бұрын

    @@CommercialPropertyAdvisors Commercial property being large buildings no one can afford to lease. I see empty buildings everywhere in New Jersey and we're being steered into a soft depression. Define hammered they ask. LOL! Personally, I think guys like you are trying to get others on board in order to try and prop up the market because none of you were around years selling your program's on how to buy. Back then you all wanted to keep your tricks and gimmicks to yourself now all of you are all over the net recommending we buy commercial real estate. Why this weird timing for all of you to climb out of the woodwork? It wouldn't surprise me if some of you are selling your properties to your students. It's the timing. I think you know exactly what I mean when I say hammered which is why I believe you're encouraging others to get involved. I spoke with one of your salesman. He was feeling me out but bailed on me for some reason. I think he did me a favor. I think you're worried its going to get hammered. I'm not a guru like you, you're the expert here, you tell me what you think real estate is going to do?

  • @johnnyb33good21

    @johnnyb33good21

    11 ай бұрын

    ​@@Earth_to_Kensho...ComeInKenshohe asked you to define "commercial" because it is a general term. Are you talking about shopping centers, retail space, office, industrial, self-storage or multi-family? Each asset class performs differently from one another during Market Cycles and he asked you to Define "hammered" are you seeing a 5%, 10% or over 20% decrease in the value of a certain type of asset class?

  • @Earth_to_Kensho...ComeInKensho

    @Earth_to_Kensho...ComeInKensho

    11 ай бұрын

    @@johnnyb33good21 All of it man... You seem clueless to what's about to occur in our economy. You're basing everything on past performance. What is about to happen to the US economy has never happened before. He knows exactly what I'm talking about. It's exactly why guys like hm are all over the net all of a sudden promoting investing in commercial reals estate.

  • @Earth_to_Kensho...ComeInKensho

    @Earth_to_Kensho...ComeInKensho

    11 ай бұрын

    @@johnnyb33good21 I'd say multi family will probably do ok... That's my prediction

  • @jackcarter-bd4tw
    @jackcarter-bd4tw10 ай бұрын

    R U married so cute