Burt M. Polson - Commercial Real Estate Broker

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Commercial vs residential real estate salespeople

If you sold or purchased a house, there is a good chance a residential agent assisted you. If you are a business owner or an investor, then you most likely interacted with a commercial broker at some point.

Both residential and commercial salespeople have several things in common. Both need to be licensed with the state, both use real estate contract forms, and both receive a commission as payment for their work.

However, there are many differences not only in the types of real estate handled, but what each does, how they stay on top of the market and the resources available to them.

Selling and Leasing

Commercial brokers sell and lease commercial real estate. Investment real estate such as a retail storefront or industrial building has tenants who come and go. Property owners usually use the services of a commercial broker to secure a new tenant.

Residential agents usually only sell houses or help buyers purchase a home.

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Proforma "pixie dust"

You will find several opinions regarding a proforma financial report for an investment property. Some descriptions used may be “working magic,”  “pie in the sky,” and “using a bit of pixie dust,” to coin a few terms.

With accurate research, a proforma statement can be a valuable tool an investor can use in determining the viability of an investment.

What is proforma?

Proforma is a method applied to a financial analysis that can draw focus to a specific figure of current or future projections. A “method” is a loosely used term as some would consider this manipulation.

You will find a proforma analysis widely used when analyzing investment real estate. There are several types of metrics used over a five or ten-year period, for example, IRR, net present value, and many more.

One could consider the five or ten-year projection of an investment property’s income and expenses to be a proforma analysis.

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Understanding the lease - part six

We have covered significant ground in this series of articles on leasing. In this final article, we are going to examine a case study where we look at the high-points of a recent lease I completed.

We started with part one where we compared a lease to a month-to-month rental agreement and what happens when your lease expires while the commencement date and rent payments were highlighted in part two.

Part three explained the security deposit and why to pay attention to the property condition and maintenance.

In part four we discussed how to handle repairs and alterations, the landlord entering the premises, subletting and terminating a lease early and in part five the types of forms and leases were illustrated.

Our case study is for a 7,500 square foot industrial building in the Napa Valley used for the production and storage of wine as well as retail sales, tasting, events and an office. I have withheld any identifiable features from our discussion for privacy.

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