Commercial Real Estate Cash Flow: Analyzing Income-Producing or Rental Real Estate, Plus Global Cash Flow Issues - (4 Parts) - Fa19

Course Length
90 mins

Richard Hamm


Upcoming Sessions


Presenter: Richard Hamm, Advantage Consulting & Training

This four-part program will be presented live on: October 15, 22, 29 & November 5, 8:30-10:00 a.m. Central Time
Recording available through: February 5, 2020
Price: $715


Banks continue to deal with commercial real estate (CRE) loans as a major portion of their loan portfolios, both performing and non-performing. 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 evaluating commercial real estate cash flow. This program demonstrates (from case studies) the key variables and concepts for determining real estate cash flow, plus primary analytical techniques such as transaction level stress-testing and compiling a global cash flow that includes all of the holding of the investor/owner/guarantor. We cover where to find information from existing sources, such as tax returns, and what additional information may be needed, such as customer rent rolls.


This seminar will address the following:

  • Net operating income (NOI) components and concepts
  • Understanding key variables within NOI: vacancy, management fees, replacement reserves and capital expenditures
  • Understanding cap rates and how they are used to link cash flow to property value
  • Using tax returns and customer rent rolls, plus issues with commercial leases
  • Unique characteristics of the major types of real estate
  • Transaction-level stress-testing of debt service coverage (DSC) and loan-to-value (LTV)
  • How to use a sample worksheet to explore the major issues, including stress-testing
  • Issues faced in the global analysis of the various holdings of the borrower/guarantor
  • Taking the global analysis beyond the face values of guarantees (contingent liabilities analysis)
  • Using the cash flow analysis as part of ongoing loan monitoring, including estimated property values, not in lieu of appraisals, but as a key part of the overall CRE process
  • Brief look at residential rentals and related cash flow and property value issues


Target Audience: Consumer lenders, mortgage bankers, private bankers, small business lenders, commercial lenders, credit analysts, loan review specialists, special assets officers, lending managers and credit officers

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