3 Simple Steps to Evaluate Any Multifamily Investment in 5 Minutes

[@CommercialPropertyAdvisors]

Every successful multifamily investor has a mentor. Get your mentor here: www.commercialpropertyadvisors.com/protege-program/

[@theviewer68]

You’re the best on commercial real estate education

[@CommercialPropertyAdvisors]

You are very kind. I am blessed to be able to do what I love; teach others how to successfully invest in commercial real estate.

[@kennethmartin7138]

This was a good breakdown on how to evaluate multi family properties. Highly informative blueprint! I appreciate your knowledge 💯

[@CommercialPropertyAdvisors]

Thank you!

[@paulwilson8085]

Very informative, the pace of the lecture is excellent. It's difficult to find a good teacher. I like how you went through this in baby steps.

[@dotunogunwale7138]

35% for expenses is extremely hard to find. I’ve done 2000 authentic underwriting on deals in the last 2yrs and I’ve not seen 35% expense yet, the lowest I’ve seen was 44.7% Now that Mr. Peter said it, I’m 1000% motivated to look for one, thanks for the motivation

[@CommercialPropertyAdvisors]

Learn more about how Total Operating Expenses are calculated here: www.commercialpropertyadvisors.com/commercial-real-estate-terms/#opex

[@EquityJunkies]

same i use 50%-55%

[@GoddessTemple528]

Ty for this video! Super simple and informative! I subscribed to your channel because I love you guys!!!! ❤️♥️❤️♥️

[@CommercialPropertyAdvisors]

Thanks for subscribing!

[@JalenREI]

best breakdown ive seen on youtube.

[@familyh1118]

How do you break down the 750k at 6.5% to get the monthly payments?

[@alyssa2861]

Hi There, Its a pretty intensive calculation, but there are tons of free tools online that can help you calculate this. Just google your question and some should pop up :)

[@rwalker27]

i couldnt figure this out either 🤔

[@ayooo888]

I’m guessing he made a mistake on the calculation. 5,400 is 6.5% of a million

[@Stylnonyall]

I think it’s because he didn’t show the adjustments for the arm rates . Eg months before first adjustments ,months between adjustments and maximum interest rate cap .this will through off the monthly payment buy a few hundred dollars

[@Stylnonyall]

He did say he was going to make some deal assumptions

[@WElizabethWilson]

I am impressed.

[@kevinkelly9107]

Man... This is my first time coming across your videos and let me just say you are amazing! This was simple and to the point, I learned a lot. I will be tuning into more videos. Thank you!

[@CommercialPropertyAdvisors]

Awesome, thank you!

[@gv8262]

Great video! Clear, precise & to the point! For the COCR calculation, if the building is a value add I'm assuming we'd add deferred maintenance or CAPEX in with the down payment?

[@ELconomics101]

Hey mr.harris always good to watch the videos you've done over the years I learned a lot from them in the crei

[@CommercialPropertyAdvisors]

Marvelous! Thanks for the comment.

[@kennethmartin7138]

Excellent video!!! Thank you for this information 💯!!!

[@CommercialPropertyAdvisors]

My pleasure!!

[@DrTimWhatleyDDS]

Great info AND you were great as Gus Breaking Bad 😁

[@be.amazingkelly]

Great info, thank you and YES.....evaluation done in less than 5

[@CommercialPropertyAdvisors]

Thanks for watching!

[@dhpark25]

That was absolutely amazing. Thank you for the clear explanations.

[@CommercialPropertyAdvisors]

You're very welcome!

[@dwightmonteith5455]

When you’re calculating cash on cash return do you include closing cost as money invested? In the example you have the down payment

[@CommercialPropertyAdvisors]

Yes! Include any closing costs that were added to the down payment on the closing statement because it's part of your original investment

[@andrewcohen8627]

Thank you great video!!!!! I learned alot from your videos.

[@CommercialPropertyAdvisors]

Glad to hear it!

[@stevesmull4356]

Should we have a maintenance reserve?

[@Kris-ku3xr]

This is awesome! I'm analyzing my first multiunit for purchase and this is very helpful. New sub here

[@CommercialPropertyAdvisors]

Glad it was helpful!

[@joanne19661]

Thank you very much Mr. Harris you wrote the note for teaching others on the board - this reminds me when I was learning best in my high school time wow it’s so awesome to learn & understand. Following to learn more 😃👍💕

[@CommercialPropertyAdvisors]

Glad it was helpful! We appreciate your feedback!

[@SHENITAFULLER]

i love this channel CLEAR VALUE GR8 JOB !!!

[@CommercialPropertyAdvisors]

Thank you!

[@jb8054]

Thank You! for your Kindness and Big Heart

[@CommercialPropertyAdvisors]

You are most welcome!

[@aftech7268]

Awesome lesson

[@CommercialPropertyAdvisors]

Thanks

[@MuscleMan500]

Great video. Simple explanation. It's probably important for everyone to look at their individual market and cater their numbers toward that. I'm interested to see what a deal would need to look like using a 3.5% down fha loan and what would make such a deal a "go". Thanks for the video

[@Trinibrethren]

Great great information sir thank you

[@CommercialPropertyAdvisors]

Thanks for the compliment!

[@loulupero4147]

Great great information Peter. Thank you! Do you offer template run numbers?

[@elijahalbert2357]

I need to learn this

[@hmj8469]

As soon as I saw that the asking price was $1 million and you were collecting $1,000 per unit on a 12 unit building I knew this was going to be a 'go'. This feel like a property in a C class area. I'm sure there's a easy to make spreadsheet that helps do this even quicker, and that spreadsheet could be used to help turn a no-go deal into a go by making changes to what you are willing to pay. Every deal's a potentially good deal at a certain price point.

[@jesuspaiditall8923]

Great video, and thank you very much!

[@CommercialPropertyAdvisors]

Glad you liked it!

[@BestMove28]

Great Info‼️. Thanks

[@CommercialPropertyAdvisors]

Glad it was helpful!

[@ragirags]

how did you calculate mortgage for 25 years at 6.5 % for 750k?

[@30musabboouf61]

Can you include everything under operating costs? Also how to estimate hoa fees?

[@superpowerforhire]

Thanks Peter!!!

[@CommercialPropertyAdvisors]

You are most welcome!

[@SW-kd9fx]

This is great, thank you! =)

[@CommercialPropertyAdvisors]

You're very welcome!

[@rpietryk4690]

These are best easy to understand loose info

[@CommercialPropertyAdvisors]

Thanks

[@rpietryk4690]

Thank you

[@CommercialPropertyAdvisors]

You're welcome

[@r.5108]

great job

[@CommercialPropertyAdvisors]

Much appreciated

[@dougreviewstheuniverse9082]

TY!

[@SouthOCTennis]

If I build the triplex from scratch, do I use 35% expenses like you mentioned, even though it’s brand new

[@michellewilson6575]

I feel smarter already!

[@CommercialPropertyAdvisors]

Thanks for watching!

[@Skumpshii]

How did you get the loan monthly payment? Not adding up to your number

[@albertlubin2127]

Love your videos. Is it fair to assume the 35% rule for Opex does not include Property mgmt cost and reserves for repair and capital expenditures? With Prop Mgmt (i.e.10%) and these reserves, would you agree that the baseline would then be closer to 60%?

[@CapitalCentral]

Where do you put the cash down?

[@CapitalCentral]

For the CF this affect the COCR no?

[@CommercialPropertyAdvisors]

A very helpful training on understanding the relationship between cash flow and cash on cash return is here: www.commercialpropertyadvisors.com/commercial-real-estate-terms/

[@eugeneperryman6586]

i like your videos im subscribed not being able to follow the exact on this one is kinda .......

[@Kris-ku3xr]

Do you typically just ask your RE agent for the cap rate in an area? ....or is this info available to non-agents?

[@CommercialPropertyAdvisors]

Yes! Ask local brokers and appraisers but also don't forget to try out AI too. This video explains: kzbin.info/www/bejne/rYmzaolrpN-AoLs

[@Kris-ku3xr]

This is great! Just watched the video. Thanks for being so helpful.

[@ermiasamdemichael8989]

Do you have a course for building multifamily?

[@CommercialPropertyAdvisors]

No! Instead, this is our perspective on development: kzbin.info/www/bejne/apbGcn2GosSmfNk

[@AbateAway]

Like this comment so I can keep coming back here 😅 this is great!!

[@benreiltd.2528]

Why short the process timing when it still took 5 min to get the metrics etc? To be able to do all of that in 10-15 min is still good when it comes to commercial property investing. 😎 thanks again

[@CommercialPropertyAdvisors]

If it sounds good after 5 minutes, then dig in deeper. You can always spend more time evaluating a deal but if it doesn't have some merit in the first 5 minutes, it rarely gets better the longer you investigate.

[@armandoolmeda7097]

amazing video, everything is correct except for the mortgage payment of $5406, with those numbers its actually $5,064. Can anybody double check this?

[@bjt1970You]

Why do you use a 25-year amortization period?

[@CommercialPropertyAdvisors]

Most lenders will not allow 30 Am loans. 25 years is usually the max.

[@gregoryfluellen4831]

What happened to 50% for expenses Peter? Especially in this environment

[@CommercialPropertyAdvisors]

The expenses rule of thumb is getting a lot of feedback on this video. Some argue that the 35% rule is best applied to under 10 units. Whereas above 10 units, 40-45%. For this video, I was trying to keep it simple. Lending underwriters use 35% as their rule of thumb.

[@morftalk]

When you talk about expenses - you mean HOA, Property Tax and fixing cost all included in that 35%?

[@eugenehammond6225]

👑

[@CommercialPropertyAdvisors]

It's humbling to get that. Thank you.

[@kampaninipot9846]

If the downpayment of $25k is being financed, wouldn’t you add that to the“Monthly Mortgage Payment “?

[@FunkInvesting]

Hmm...I wonder if I would be considered a mentor? I show people a turnkey multifamily investment opportunity and give them all the information they need to make the most informed decision possible. However, I only work with the one opportunity. Would that count do you think?

[@eugeneperryman6586]

I Found it annoying that I don't have any Amortization formulas

[@CommercialPropertyAdvisors]

No worries. Google for a free amortization calculator

[@vivienhounsounou1867]

GOLD

[@antoniostephano]

Doesn't your book say that 50% is the average for expenses? Aren't most banks requiring 30-35% down on these types deals. And isn't debt closer to 7,5%? These changes make a big difference in the underwriting and render this not such a good deal. Expenses are go mg up not down. Pencils down?

[@CommercialPropertyAdvisors]

The expenses rule of thumb is getting a lot of feedback on this video. Some argue that the 35% rule is best applied to under 10 units. Whereas above 10 units, 40-45%. For this video, I was trying to keep it simple. Lending underwriters use 35% as their rule of thumb.

[@giovannimario8363]

$5406/ month x12 months = $64,870.00; where did the $60,768.00 came from? unless you meant $5,064.00

[@philosophyforum4668]

Strange that an owner looking to sell his property would not make all this information readily available.

[@bohdan4772]

I’ve only seen 35% on pro forma’s which were a long shot from the truth

[@CommercialPropertyAdvisors]

The expenses rule of thumb is getting a lot of feedback on this video. Some argue that the 35% rule is best applied to under 10 units. Whereas above 10 units, 40-45%. For this video, I was trying to keep it simple. Lending underwriters use 35% as their rule of thumb.

[@Keyman102976]

I think the annual debt service calculation may be off. Monthly payment = $4,062/month ($48,744 annually). I based this off $750,000 loan, 6.5%, 25y Amortization

[@karl-lo1up]

Grandpa

[@zdobson88]

$5,406 X 12 = $64,872 🤷🏼‍♂️

[@brandonlifefamily8331]

Probably didn't clear his calculator but the basic principle still applies, cash flow around 24k instead of 28k. Still about 9% return on your money vs bank at about 5% there are other advantages like tax depreciation, and equity growth, looks like a solid deal, but if you had a hard money loan at 10% for down payment it would be negative so it's not a start with no money deal.