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Digg it UP - A True Net Operating Income
Can your business sell its products to other businesses using a mail-order catalog? Probably. And make a profit? Maybe, as long as you follow some proven guidelines. Here are a few of them. Niche and grow rich Your catalog needs to fill a specific void in the market. All of the successful business-to-business (B2B) catalogs target a narrow slice of a larger market. In the home workshop marketplace, U.S. General Supply sells tools, nuts and bolts. In the business products marketplace
The job of the realtor: to show the property in its best light. The job of the buyer: to sort through the nonsense to find the real value of the property.
The thing to remember is, benefit. People will be motivated by what benefits them the most. Start to think like a property owner, instead of a buyer, and you may find yourself one step ahead of the game. Once you have analyzed many deals, it
Running a successful trucking company requires three things.1. Finding truck loads of freight 2. Moving the truck load from point A to point B 3. Managing all the little details so that 1 and 2 happen successfullySounds easy, doesn’t it? However, most trucking companies fail because of the little details that go wrong. Repairs are missed, so trucks stop working. Drivers are not paid on time, so the drivers quit. Fuel is not paid for, so the trucks stop moving freight. Although the pr
Net operating income is the gross income less the operating expenses. Depreciation and mortgage interest are not considered in the calculation. A different calculation will be used with consideration to proposed mortgage payments to determine a maximum loan size. This called a “Debt Service Coverage Ratio” calculation.
It is typical of the industry to consider the following expenses as "operating expenses."
Real Estate Taxes
Property Insurance
Utilities
Repairs and Maintenance
Janitorial
Interior/Exterior Decorating (Usually applies to Apartments)
Management
Too many times I am looking at deals where the borrower has fallen in love with a particular property. The realtor has provided them with a pro forma displaying excellent cash flow with no down side. The buyer is all set with their down payment money and is just waiting for me to flip the magic funding button so they can reap the endless benefits of their investment property.
The first thing I explain to these borrowers is the fact that the numbers they were provided were not real. They often show what income the park could generate at full occupancy with increased rents. This may be helpful to some investors looking for upside potential, but a lender sees it as completely useless. A lender’s best clue to how a property will perform in the future is to look at how it has performed in the past. Lenders have special filtering goggles that only allow them to see a number representing risk. They don’t look at hopes, dreams, or speculation. For the most part a lender wants to see that a property has cash flow to support normal expenses including loan payments with a little cash left over. Cash flow is key to any conventional finance program.
So we throw out the pro forma information and collect up to 3 years of actual income/expense statements. After we have what we would think to be real numbers, we start to sort information further. Park owners will, more so than not, include expenses such as car insurance, health insurance, gas, bank charges, etc. These are usually considered to be outside the definition of operating expenses. Lenders are looking for “normal” operating expenses. Expenses that are required for the park to run, normally, are looked at. Some is left to interpretation, but these numbers become easier to filter out as you become experienced in the buying process.
The expense ratio for a mobile home park will usually be about 20%-35% of the gross income. Park-owned mobiles, master-metered utilities, miscellaneous amenities, etc. are factors that will send the ratio to the higher end of the spectrum. Individually metered utilities, tenant-owned mobiles, etc. tend to mitigate expenses.
The area of the country will also be a big clue as to what can be expected in expenses. In FL taxes can be extremely high. This is also true in CA. Many times a tax expense in CA or FL will change dramatically from before it was purchased. The reason for this is that CA and FL adjusts property taxes based on the date of sale. Once title is transferred, the new tax adjustment is set in place.
The job of the realtor: to show the property in its best light. The job of the buyer: to sort through the nonsense to find the real value of the property.
The thing to remember is, benefit. People will be motivated by what benefits them the most. Start to think like a property owner, instead of a buyer, and you may find yourself one step ahead of the game. Once you have analyzed many deals, it
I think back on my time working for someone else and almost have to laugh now. It seems so distant and far away that it isn't even real to me anymore!But I have to remind myself how I felt at the time.The mornings were the worst. I had to leave earlier and earlier to get to work on time with all the traffic. Each morning an epic battle was waged just to get out of bed. On one side was my sense of obligation; on the other was the snooze button on my alarm clock.I remember absolutely HATING my a
Utilities
Repairs and Maintenance
Janitorial
Interior/Exterior Decorating (Usually applies to Apartments)
Management
Too many times I am looking at deals where the borrower has fallen in love with a particular property. The realtor has provided them with a pro forma displaying excellent cash flow with no down side. The buyer is all set with their down payment money and is just waiting for me to flip the magic funding button so they can reap the endless benefits of their investment property.
The first thing I explain to these borrowers is the fact that the numbers they were provided were not real. They often show what income the park could generate at full occupancy with increased rents. This may be helpful to some investors looking for upside potential, but a lender sees it as completely useless. A lender’s best clue to how a property will perform in the future is to look at how it has performed in the past. Lenders have special filtering goggles that only allow them to see a number representing risk. They don’t look at hopes, dreams, or speculation. For the most part a lender wants to see that a property has cash flow to support normal expenses including loan payments with a little cash left over. Cash flow is key to any conventional finance program.
So we throw out the pro forma information and collect up to 3 years of actual income/expense statements. After we have what we would think to be real numbers, we start to sort information further. Park owners will, more so than not, include expenses such as car insurance, health insurance, gas, bank charges, etc. These are usually considered to be outside the definition of operating expenses. Lenders are looking for “normal” operating expenses. Expenses that are required for the park to run, normally, are looked at. Some is left to interpretation, but these numbers become easier to filter out as you become experienced in the buying process.
The expense ratio for a mobile home park will usually be about 20%-35% of the gross income. Park-owned mobiles, master-metered utilities, miscellaneous amenities, etc. are factors that will send the ratio to the higher end of the spectrum. Individually metered utilities, tenant-owned mobiles, etc. tend to mitigate expenses.
The area of the country will also be a big clue as to what can be expected in expenses. In FL taxes can be extremely high. This is also true in CA. Many times a tax expense in CA or FL will change dramatically from before it was purchased. The reason for this is that CA and FL adjusts property taxes based on the date of sale. Once title is transferred, the new tax adjustment is set in place.
The job of the realtor: to show the property in its best light. The job of the buyer: to sort through the nonsense to find the real value of the property.
The thing to remember is, benefit. People will be motivated by what benefits them the most. Start to think like a property owner, instead of a buyer, and you may find yourself one step ahead of the game. Once you have analyzed many deals, it
Despite what many may tell you…successful marketing does not happen overnight. It takes time, testing and a plan.You may be extremely surprised to first learn that some marketing and advertising campaigns are considered a success if they break even. If you spend $500 on the ad placement and you get back $500 in profit, it may be a great success for your business.WHAT? How can breaking even be considered a success?Most business owners never put 3 seconds worth of thought into what the lifetime
So we throw out the pro forma information and collect up to 3 years of actual income/expense statements. After we have what we would think to be real numbers, we start to sort information further. Park owners will, more so than not, include expenses such as car insurance, health insurance, gas, bank charges, etc. These are usually considered to be outside the definition of operating expenses. Lenders are looking for “normal” operating expenses. Expenses that are required for the park to run, normally, are looked at. Some is left to interpretation, but these numbers become easier to filter out as you become experienced in the buying process.
The expense ratio for a mobile home park will usually be about 20%-35% of the gross income. Park-owned mobiles, master-metered utilities, miscellaneous amenities, etc. are factors that will send the ratio to the higher end of the spectrum. Individually metered utilities, tenant-owned mobiles, etc. tend to mitigate expenses.
The area of the country will also be a big clue as to what can be expected in expenses. In FL taxes can be extremely high. This is also true in CA. Many times a tax expense in CA or FL will change dramatically from before it was purchased. The reason for this is that CA and FL adjusts property taxes based on the date of sale. Once title is transferred, the new tax adjustment is set in place.
The job of the realtor: to show the property in its best light. The job of the buyer: to sort through the nonsense to find the real value of the property.
The thing to remember is, benefit. People will be motivated by what benefits them the most. Start to think like a property owner, instead of a buyer, and you may find yourself one step ahead of the game. Once you have analyzed many deals, it
Are your direct mail response rates lower than you expect? Check your sales letter or direct mail package against this checklist to uncover the reasons for your poor response.LIST You are mailing to people who are never likely to buy You are not mailing to others in the same business who influence the buying decision Your list is out of date Your names and addresses are not formatted correctly for proper delivery Your list has job titles only, not names
The expense ratio for a mobile home park will usually be about 20%-35% of the gross income. Park-owned mobiles, master-metered utilities, miscellaneous amenities, etc. are factors that will send the ratio to the higher end of the spectrum. Individually metered utilities, tenant-owned mobiles, etc. tend to mitigate expenses.
The area of the country will also be a big clue as to what can be expected in expenses. In FL taxes can be extremely high. This is also true in CA. Many times a tax expense in CA or FL will change dramatically from before it was purchased. The reason for this is that CA and FL adjusts property taxes based on the date of sale. Once title is transferred, the new tax adjustment is set in place.
The job of the realtor: to show the property in its best light. The job of the buyer: to sort through the nonsense to find the real value of the property.
The thing to remember is, benefit. People will be motivated by what benefits them the most. Start to think like a property owner, instead of a buyer, and you may find yourself one step ahead of the game. Once you have analyzed many deals, it
Yes? Then do something positive about the behaviors of those important external audiences of yours that MOST affect your operation.Those embers can leap into flame when business, non- profit or association managers use public relations to alter individual perception among their target publics, leading to changed behaviors and helping to achieve their managerial objectives.In the process, things can really blaze when managers take steps to persuade their key external folks to their way
The job of the realtor: to show the property in its best light. The job of the buyer: to sort through the nonsense to find the real value of the property.
The thing to remember is, benefit. People will be motivated by what benefits them the most. Start to think like a property owner, instead of a buyer, and you may find yourself one step ahead of the game. Once you have analyzed many deals, it will become easier to spot numbers that are probably an incorrect reflection of operation. I suggest getting out to shop, shop, shop. See what's out there. It will come together as time goes on, and experience has begun to weigh in your favor.
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