Commercial property investment metrics

Before purchasing any commercial property, know the property cash in and cash out  and the pro forma statement of cash flows. This is an annual statement listing property income and expenses through net operating income (NOI) and before tax cash flow (BTCF).  

 

Having all of the Annual Property Operating Data will go a long way in knowing the true value of the property. Commercial brokers listing a property for sale should be able to provide a full investment analysis presentation to include operating income analysis, gross income vs operating expenses, and IRR. This is never a substitute for buyers doing their own due diligence.  

 

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