BankNewswatch

CRE Lending: Cash Flow Analysis & Cap Rates

Thursday, May 23nd, 2024 1:30 pm - 3:30 pm CT

A BankWebinars.com Program

Click Here to register for program $299.00

Click Here to register for program and receive recording $449.00


Banks continue to deal with commercial real estate (CRE) loans as a major portion of their loan portfolios. Also, many borrowers have large holdings of income-producing or rental real estate. Whether directly financing these assets or including the income stream(s) in your overall credit analysis, it is important to understand key analytical concepts utilized in evaluating CRE cash flow.

Join us for a comprehensive discussion of cash flow or net operating income (NOI) concepts and transaction-level stress testing. We’ll walk through a sample worksheet to explore the major issues, including stress testing, demonstrated with a case example.

What You'll Learn
  • Understanding key variables: vacancy, management fees, and replacement reserves
  • Using NOI along with a cap rate to estimate current property value
  • Moving from NOI to cash flow available for debt service (CFADS) and DSC
  • Stress-testing of debt service coverage (DSC) and loan-to-value (LTV) at transaction level

Instructors

Richard Hamm has been training bankers for 28 years, designing and delivering courses specializing in commercial lending and credit, including portfolio and risk management, commercial real estate (CRE) and appraisals, plus selling and negotiating skills, and director training. He also conducts eight senior lender forums on a periodic basis in multiple states and one series at the national level.