Understanding Your Rent Roll in Commercial Real Estate Investing

Jake & Gino: Real Estate Investing & Multifamily

Jake & Gino

Smartinvesting, Buyingrealestate, Investing, Multifamilyrealestateinvesting, Business, Investingsmart, Apartmentinvesting, Management, Makingmoney, Realestateinvesting, Cashflow, Jakeandgino, Realestateinvestment, Commercialrealestateinvesting, Buyingapartmentbuildings, Entrepreneurship

4.9 • 842 Ratings

🗓️ 24 September 2021

⏱️ 9 minutes

🔗️ Recording | iTunes | RSS

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Summary

Mike Taravella discusses the importance of understanding your rent roll as a buyer and an owner. Key Information: #1. Understand your occupancy! If you are getting agency debt you need 90% for 90 days! Get a report if it is not on the rent roll. As an owner, do your reviews to make sure your PM is operating efficiently and your turnover is low. #2. Market Rents What are the true market rents? Do your own due diligence to prove out the comps provided. As an owner, keep track of the rents in your market to know when you need to raise them. You NOI relies on it! #3. Actual Rent Charged Know how long it should take to get to market rents… hint… it isn’t overnight! Your loss to lease is the difference between your rents and the market. Know where you are and are you executing your business plan? #4. Lease to and Lease From See where the value add is when people have been there for a long time! How close are all the leases? If they are all in the same month, that could be a mass exodus of your property. #5, Understand the balances As for your 30-60-90 day delinquency reports to understand where the property is. As an owner, who is paying and who is not? Add a narrative as to why someone is past due for understanding the story and potential eviction support. Pro tip: Know your rent roll, understand your takeover plan, and make sure you are capitalized! Contact: MikeT@RANDCRE.com To register to invest with us: https://jandg.activehosted.com/f/58 Rand CRE’s Facebook:   https://www.facebook.com/randcre Rand CRE’s Linkedin:   https://www.linkedin.com/company/randcre Rand CRE’s Instagram:   https://www.instagram.com/randcre

Transcript

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0:00.0	Welcome to the RANCRE show, commercial real estate with no stone left unturned.
0:09.7	Hey, everyone. Welcome to the RANCRI show. I'm your host, Mike Taravella. And today we're going to understand a very important document when it comes to commercial real estate investing, and that is your rent rule.
0:22.0	So we're going to go on the perspective of acquisition mode and managing mode to make sure that you
0:26.8	understand, better understand the rent role, what to look out for, what to key in on,
0:31.9	and how to keep everyone accountable in the process. So first things first is understanding
0:36.6	your occupancy. This is important on the buy side
0:40.0	because your number one investor, the lender, is going to want to make sure that you understand,
0:45.1	that you're hitting your key performance indicators. So the biggest thing for agency debt is that
0:51.1	90% the occupancy threshold is generally around 90% or greater for the last 90 days.
0:58.3	So as you're going through the deal and say you get under, you know, underwriting it, due diligence
1:03.9	and getting it under contract, you need to make sure that you're at least hitting that
1:07.9	threshold throughout because what can happen is your proceeds get cut in
1:11.9	half, which means you have to raise more money, which means it could be cutting it thin when it
1:17.5	comes to closing. So just making sure you have performance clauses with the seller and making
1:21.8	sure they're doing their job throughout the process. Also, when it comes to the managing side, occupancy is super important,
1:29.8	obviously, to hit your key performance indicators that you underwrote that, but more importantly,
1:35.0	it's just making sure you're understanding the trends in the marketplace. So really important that
1:40.4	you know that, but also just making sure that there's any major swings.
1:50.1	And at Foley, we have vacant dash rented and vacant dash unrented, which at first, they're both vacant, but the key thing to hone in on is the dash indicates what the next resident is going to do.
1:58.3	So unrented just means there's no current resident in place versus rented
2:02.7	means there's going to be a resident in place and we've collected a movement fee, which is good.
2:08.0	So some vacancy isn't always treated the same, but it's important you understand the upcoming
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