The IRS gives a tax break called depreciation to commercial property owners. According to the rules, an apartment building will be worthless after 27.5 years of ownership. That means a building depreciates about 1/27, or 3.64% per year. Therefore, each year the owner is allowed to deduct 3.64% of the building’s value from the property’s [...]
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When apartment investors evaluate a potential new property, they have many points to consider. If their preliminary analysis looks promising, they’ll eventually start figuring how to finance the project. At this point they will check with various lenders to discover their current loan parameters. What loan-to-value (LTV) percentage will they honor? What debt service coverage [...]
In this video, we walk through a financial analysis of an apartment building for sale in Colorado Springs. After a brief introduction of the property, we list the assumptions we’ll be making about the possible purchase. These include the proposed LTV of the loan, the amount estimated for reserves and closing costs, the projected annual [...]
In this short video we will walk through a gap analysis for the multifamily market in Colorado Springs. A gap analysis shows us the gap between the supply and the demand for multifamly properties. Using data from the latest census, we show the trend for household growth in the city through 2015. We factor in [...]
In response to an inquiry regarding the prospects of these two markets, I put together the following short clip. In it I pulled data from the Bureau of Labor Statistics as well as subscription services comparing DFW and Las Vegas for job growth over the past decade, and projections of population growth through 2015.
