81638 Resource 78777 78860 1071 1105974198159 1215930904616 Controlled Commercial Financing and How to Guestimate a Commercial Triple Net Lease Rate What's a Fair NNN Rent for a Commercial Property to Get Commercial Financing? <p>You are a commercial mortgage broker or a commercial mortgage banker.&nbsp; You are seeking a new commercial mortgage loan on an owner-used commercial property.&nbsp; The owner's tool company occupies the commercial property.&nbsp;&nbsp; You need to prepare a pro forma operating statement in order to apply for a commercial mortgage loan, but you don't know what lease rate to use.<br /><br />No problem.&nbsp; Just work backwards from the commercial property's value.&nbsp; If you know the commercial property is worth $600,000, just assume a cap rate of 9%.&nbsp; Nine percent of $600,000 is $54,000 per year in net income, after operating expenses.<br /><br />If we assume the property is leased on a triple net basis, then the only operating expenses are replacement reserves (say, 3% of effective gross income) and management (say, 4% of effective gross income).&nbsp; We therefore multiply the $54,000 in net operating income by 107% (3% plus 4%) to arrive at the effective gross income of $57,780.<br /><br />The effective gross income is just the gross rental income less 5% for vacancy and collection losses.&nbsp; Finally, simply take $57,780 and divide it by 95% to get the triple net annual gross rental income of the commercial property!<br /><br />You can learn the entire practice of commercial mortgage finance for just $499 on C-Loans.<br /></p> 9 application/xml false commercial construction lender commercial construction loan commercial financing commercial loan commercial mortgage commercial real estate loan mezzanine lender mezzanine loan preferred equity Learn Commercial Mortgage Brokerage for Just $499 Nine Hour Video Course Covers Marketing, Underwriting, Packaging, Placement, and Fee Collection http://www.c-loans.com/video.html Mozilla/4.0 (compatible; MSIE 7.0; Windows NT 5.1; .NET CLR 1.1.4322; .NET CLR 2.0.50727) 127.0.0.1 127.0.0.1 johngaudio 216.87.92.57 false true false false true 198508 false false true false false false true 78777 blog blogsite/CLoans/web