The Complete Guide to Real Estate Finance for Investment Properties

The Complete Guide to Real Estate Finance for Investment Properties" by Steve Berges

This book focuses on analyzing real estate investment deals. Specific topics covered include:
* The Relevance of Finance and How it Applies to Value
* Time Horizon
* Volume of Investment Activity
* Property Types
* Costs of Funds
* Amortization Period
* Amount of Funds Borrowed
* Loan Duration
* Loan Fees
* Prepayment Penalties
* Leverage
* Debt
* Equity
* Blended Financing and the Weighted Average Cost of Capital
* Options

Then it broke down real estate investment performance measurements:
* Net Income Return of Investment
* Cash Return on Investment
* Total Return on Investment
* Net Operating Income
* Cap Rate
* Debt Service Coverage Ratios
* Operating Efficiency Ratios
* Gross Rent Multiplier
* Operating Ratio
* Break-Even Ratio
* Future Value Analysis
* Present Value Analysis
* Net Present Value Analysis
* Internal Rate of Return

It also covered appraisals and the three primary methods plus financial statements. The website is http://www.thevalueplay.com where he offers a deal analyzer.

Biggest Takeaway: I had never heard of the Operating Efficiency Ratio. That is simply total operating expenses divided by square feet. "The OER is a computation that measures the operating expenses of an investment property relative to its size. The ratio is useful for both multifamily and commercial real estate properties. The result provides a measure of how efficiently the property can be operated. The lower the number, the less it costs to manage and operate the property." The resulting number is the price per square foot the manage the property.

Casey Ryan Richards
http://www.CaseyRyanRichards.name

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