August 12, 2020  
  Real Estate Finance is a daily online magazine covering small business news. We help entrepreneurs transform ideas and innovations into greatness.

Real estate entrepreneurs need to be on top of the money. This section shares tools and tips for monitoring all the financial aspect of real estate investment.

Real Estate Finances

  • Amortization in Real Estate - When buying real estate, most investors specify a holding period. To determine your potential profits at sale you will need to build an amortization table.
  • Private Equity in Real Estate - Most the time you think of private equity groups that buy up companies. In real estate, private equity groups buy up buildings and invest in properties for preferred returns.
  • Creating a Real Estate Operating Budget - A realistic operating budget is absolutely essential if you are going to own and operate real estate. Here are a few suggestions for improving your budget.
  • Managing a Construction Budget - This article is to help entrepreneurs learn how to manage a construction budget in order to avoid surprises. Budget over-runs in construction can be fatal to a start-up or small company with limited resources. Learn how to manage the budget and avoid some of that uncertainty.
  • What is a Cap Rate? - A simple method for valuing commercial real estate is to take the year 1 net operating income (NOI) and divide it by the cap rate to get a value. So what is a cap rate? Where do they come from? Why are they useful? Keep reading to find outÖ
  • Depreciation in Commercial Real Estate - If you own real estate, one of the big benefits is that it is a depreciable asset. This means that you can record an expense each year for the wear and tear on your building. Letís take a look at how depreciation of your real estate can help you.

  • Loan to Value Ratio - If you have a project you want to get financed you will need to understand the loan to value ratio.
  • Basics of Valuing and Acquiring Commercial Real Estate - This article teaches the budding real estate entrepreneur the basics of valuing commercial real estate properties. Four methods of valuation Ė direct cap value, discounted cash flow, cost per square foot, and replacement cost Ė are discussed to provide the entrepreneur with a balanced approach to valuation.
  • The Hidden Expenses of Real Estate Ownership - If you are considering owning commercial real estate, you should be aware of the hidden expenses of owning that real estate. Be on the look-out for these items, including capital expenditures, credit loss, tenant improvements, brokerís fees, and general vacancy.
  • The Importance of Equity in Real Estate - Purchasing real estate can be a complicated and expensive process. A key feature of most commercial real estate deals is an equity requirement by the purchaser. This requirement is essential for markets to function well, hereís why.
  • Keys to Financing Your Development Project - As you work on your latest real estate development donít forget to think about these four keys to successfully financing your project: equity, pre-leasing quantity, pre-leasing quality, and guarantors.
  • ARGUSS for Real Estate Entrepreneurs - If you are considering getting into the commercial real estate business, you need to be aware of a software program that is quickly becoming the industry standard: ARGUS. ARGUS is a program that helps you create complex cash-flow models with ready-made sensitivity analysis that will facilitate your decision making
  • What is Highest and Best Use? - Highest and best use is a concept that is often misunderstood. This article discusses the several alternate meanings of highest and best use, and also suggests the definition that entrepreneurs should rely on when making real estate decisions.
  • Modeling Your Real Estate Loan in Excel - Whether you are buying a car or a piece of real estate, brokers are always trying to get you focused on your loan payments. Focusing on payments alone, however, is a mistake. In this article you will learn how to create an Excel model for your loan to help you understand what is going on.
  • Earnest Money - Looking to buy some real estate for your small business? Then youíll need to learn about the earnest money deposit.
  • Market Analysis - If you are considering a retail venture of any kind, you will want to get a good market analysis before picking your location. Here are a few ideas for a do-it-yourself market analysis as well as options for purchasing one.
  • Defeasance - Refinancing your home is a relatively simple process because there is rarely a pre-payment penalty. Many commercial loans donít offer prepayment, so defeasance is something you often see instead.
  • Budgeting for Capital Repairs - One of the pitfalls of real estate ownership is a failure to plan for capital repairs and replacement. Hereís an easy way to prepare and plan for capital repairs.
  • Recourse In Real Estate Financing - When you are financing your real estate purchase, pay close attention to the section on recourse. This article describes more about what recourse is.
  • Basic Terms of Real Estate Debt Financing - If you use debt financing on your next real estate purchase, you should be familiar with some of the basic terms your lender may use.
  • Escrow and Real Estate - Escrow is a term that can have a wide variety of meanings in real estate. Whether itís an escrow account to help you prepare for taxes, or closing funds held in escrow, you should understand this term as it relates to your real estate transactions.
  • Adjustable Rate Mortgage (ARM) - If you are looking to invest in real estate as part of your entrepreneurial plan, you should be aware of the adjustable rate mortgage (ARM) as a financing tool.




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