Banks continue to deal with commercial real estate (CRE) loans as a major portion of their loan portfolios. Also, many borrowers still have large holdings of income-producing or rental real estate. Whether directly financing these assets or including the income stream(s) in your overall credit analysis, it is important to understand key analytical concepts in developing CRE cash flow. This program demonstrates (from a case study) the key variables and concepts for determining real estate cash flow, including transaction-level stress-testing and where to find information from existing sources, such as tax returns, and what additional information may be needed, such as customer rent rolls.
Specific subjects that will be covered during the seminar:
- Net operating income (NOI) components and concepts
- Understanding key variables within NOI: vacancy, management fees, replacement reserves and capital expenditures
- Using tax return schedules and customer rent rolls
- Transaction-level stress-testing of debt service coverage (DSC) and loan-to-value (LTV)
Target Audience: Commercial lenders, credit analysts and small business lenders; consumer lenders, mortgage bankers and private bankers; loan review specialists, special assets officers, lending managers and credit officers