The Operating Expense Ratio (OER) tells you what percentage of a property’s gross income is consumed by operating expenses. Formula: OER = Operating…

Title is legal ownership. When you purchase commercial real estate, you receive a deed that transfers title from the seller to you.

Beyond title, every commercial acquisition involves a short list of due diligence documents. As a beginner, your job is to recognize each one, know…

Net Operating Income — NOI — is the single most important metric in commercial real estate. If you understand only one number from this course, it is…

Longterm commercial leases almost always include rent escalation provisions — scheduled increases in base rent over the lease term. How those…

Two properties selling for $3,000,000 each are not comparable unless you know what you’re buying per unit. Enter price per unit and price per square…

Debt Service Coverage Ratio (DSCR) measures whether a property generates enough NOI to cover its loan payments with room to spare. Formula: DSCR =…

A commercial lease defines who pays which expenses. The two poles of the spectrum are gross leases and net leases — and everything in between.

NOI is the property’s income before financing. Cash Flow Before Tax (CFBT) is what the investor actually receives in their bank account after paying…

LoantoValue (LTV) is the ratio of the loan amount to the appraised value of the property. Formula: LTV = Loan Amount ÷ Appraised Value A lender…