Financial Indicators For Commercial Income Producing Properties

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Mortgage and Lending with America One Mortgage Advisors CA DRE #02062657

Financial Indicators For Commercial Income Properties:

Gross Rent Multiplier (GRM)

Price of the Property Divided by the Gross Potential Income (GPI)

PRICE ÷ GPI = GRM

What Does This DOWN & DIRTY INDICATOR Tell You ???

For Apartments:

3.5X to 4.5X = Low Income Property

4.5X to 6.5X = Median Income Property

6.5X to 8.5X = Upper Income Property

For low income property , since the price is low the GPI (Total Potential Rent) divided into the price will produce a small number. As the price of the property increases the GRM generally increases.

For Gross Leased Office Buildings:

5.5X to 6.5X = Class C

6.5X to 7.0X = Class B

7.0X to 8.5X = Class A

Modified Net or Gross Leases will cause the multipliers to vary. When we have a Net Lease (Sometimes referred to as a Net, Net, Net Lease) the GRM will have no meaning.

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Christopher Shearer is a multi-family / commercial real estate consultant achieving property owners the highest possible NOI through the implementation of optimal rents for the property, accomplished through careful market, property, comparison grid analysis, effective cost control and revenue improvement programs; identify and analyze trends and recommending appropriate strategies to increase a properties maximum efficiency. Expert at Preparing new investment analysis presentations, offering memoranda and marketing materials, including key investment metrics. IRR, COC, DCR, CR etc.

A seasoned professional, with over 15 years' experience in real estate and finance management. A real estate broker licensed in Florida and Virginia specializing in real estate and asset management of multi-family and commercial properties. Christopher is currently pursuing his M.B.A. in real estate, he holds a B.A. in business as well as an A.A. in business management. Christopher has the following state licenses; Virginia Real Estate Broker, Florida Real Estate Broker, Florida Mortgage Broker and Colorado Mortgage Broker.

Contact me for a consultation and analysis of your commercial or multi-family properties.

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