Learn how to design investment analysis presentations that are easy to understand and will motivate clients to make investment decisions. Participate in hands-on demonstrations of how to use CCIM technology tools for different investment analysis output levels.

1. Investment Analysis Tools
to Guide Investment Decisions
Steven R. Price, CCIM
Price Properties, Inc.
Colorado Springs, Colorado
10:30 – 11:45

2. Disclaimer
• The screenshots contained herein include
– CCIM Excel® templates
• 5-Year Analysis Workbook
• DCF Analysis Workbook v9.5
• Lease vs. Purchase Workbook
– STDB hosted software available to CCIM members
– Commercially available packaged software
Neither the CCIM Institute or the Presenter are selling or endorsing the commercially
available software shown. It is being presented solely for illustration purposes to
reflect differences between CCIM-owned and CCIM-endorsed products.

3. Objectives
• Evaluate various investment analysis tools
• Use digital tools to enhance your presentation,
not dominate it
• Blend all skills and tools to:
– Improve Listing Decisions
– Improve Investment Decisions
– Improve Presentations
– Close more transactions

4. What’s in your tool belt?
Taxation
Negotiating
Forecasting
Financial
Analysis
Presenting
GRM
Supply &
Demand
NPV
Capital
Accumulation
IRR
Financing
User
Decisions
Investor
Benchmarks
Calculator
GIS
GRM
Site Analysis
Partnerships
Computer
Investor
Decisions
Tablet
Software
Cash-on-Cash

5. Steve’s 1st Rule
Computer don’t sell real estate.
People do.
People don’t trust computers.
Trust is the key to selling anything.

6. Are they really
interested or just
shopping?
How do I get
them to like me
and trust me?
How do I get
them to make a
decision?
What can I do to
make this more
interesting?
Will they
understand the
terminology?
Should I dig into
the details or
keep it simple?
Will they
understand the
lingo?
How much time
will I need to
make my point?

7. Are they really
interested or just
shopping?
How do I get
them to like me
and trust me?
How do I get
them to make a
decision?
What can I do to
make this more
interesting?
Will they
understand the
terminology?
Should I dig into
the details or
keep it simple?
Will they
understand the
lingo?
How much time
will I need to
make my point?

8. Qualifying
Needs
Urgency
Motivation
Expectations
Resources
Authority
Loyalty
________________________
________________________
________________________
________________________
________________________
________________________
________________________

9. Are they really
interested or just
shopping?
How do I get
them to like me
and trust me?
How do I get
them to make a
decision?
What can I do to
make this more
interesting?
Will they
understand the
terminology?
Should I dig into
the details or
keep it simple?
Will they
understand the
lingo?
How much time
will I need to
make my point?

10. If you don’t give trust to
others, it’s because they
haven’t earned it.
If you don’t get trust from
others, it’s because YOU
haven’t earned it.
Gitomer
Little Teal Book of Trust, Jeffrey Gitomer

11. All things being
equal, people want to do
business with their friends.
All things being not quite so
equal, people still want to
do business with their
friends.
Gitomer
Little Teal Book of Trust, Jeffrey Gitomer

12. Are they really
interested or just
shopping?
How do I get
them to like me
and trust me?
How do I get
them to make a
decision?
What can I do to
make this more
interesting?
Will they
understand the
terminology?
Should I dig into
the details or
keep it simple?
Will they
understand the
lingo?
How much time
will I need to
make my point?

13. Center for Creative Learning

14. SAVI Learning Styles
•
•
•
•
Somatic
Auditory
Visual
Intellectual
Learning by Doing
Learning by Listening
Learning by Observing
Learning by Analyzing
The Accelerated Learning Handbook, Dave Meier

15. Steve’s SAVI Scores
• Meier conducted an 80 question
survey where attendees answered
questions about how they perceive
they learn best, what captures the
interest and attention, etc.
S
A
V
I
24
18
13
25
The Accelerated Learning Handbook, Dave Meier-

16. Steve’s SAVI Scale
Auditory/Affective
(Feeling)
37%
16%
Somatic
Visual
(Doing)
(Observing)
24%
23%
Intellectual
(Analyzing)
The Accelerated Learning Handbook, Dave Meier

17. 24
28
32
AUDITORY
Type 1
4
8 12
16
20
Type 4
16
12
8
4
4
8 12
16
20
24
16
12
8
4
20
Type 3
20
32 28 24
32 28 24
SOMATIC
INTELLECTUAL
Type 2
28
32
VISUAL

18. Use Visual Aids
There are twenty-two times the
number of nerves from the eye to the
brain as from the ear to the brain.
The Psychology of Selling, Brian Tracy

19. Are they really
interested or just
shopping?
How do I get
them to like me
and trust me?
How do I get
them to make a
decision?
What can I do to
make this more
interesting?
Will they
understand the
terminology?
Should I dig into
the details or
keep it simple?
Will they
understand the
lingo?
How much time
will I need to
make my point?

20. MOTOR &
SENSORY CORTEX
TRIUNE
BRAIN
NEOCORTEX
•Think
•Body Movement
•Reason
•Talking
•Plan
•Solve
•Learn
LIMBIC
SYSTEM
•Excitement
•Emotion
•Long Term Memory
•Instincts
•Feeding
•Fighting
•Fleeing
•Create
•Verbal
REPTILIAN
BRAIN
•Survival
•Balance
•Autonomic
Systems

21. Buyer Types
1. Apathetic Buyer (about 5%)
– Will never buy anything, no matter how good
2. Self-Actualizing Buyer (about 5%)
–
Knows exactly what s/he wants and $$$
3. Analytical Buyer (about25%)
–
Self-contained and task oriented; slow and specific
4. Relationship Buyer (about25%)
–
Concerned about people and their opinions
5. Driver Buyer (about 25% depending on what you sell)
–
Direct, impatient, straight to the point; deal maker
6. Socializer Buyer (about25%)
–
Outgoing, extroverted, achievement & results oriented
The Psychology of Selling, Brian Tracy

22. Are they really
interested or just
shopping?
How do I get
them to like me
and trust me?
How do I get
them to make a
decision?
What can I do to
make this more
interesting?
Will they
understand the
terminology?
Should I dig into
the details or
keep it simple?
Will they
understand the
lingo?
How much time
will I need to
make my point?

23. Time Management
The average attention span of an adult
is about three sentences.
The Psychology of Selling, Brian Tracy

24. Are they really
interested or just
shopping?
How do I get
them to like me
and trust me?
How do I get
them to make a
decision?
What can I do to
make this more
interesting?
Will they
understand the
terminology?
Should I dig into
the details or
keep it simple?
Will they
understand the
lingo?
How much time
will I need to
make my point?

25. CI-104 Case Study

26. Hidden Lakes Retail
Year 1
Year 2
Year 3
Year 4
Year 5
NATIONAL CREDIT TENANTS
Potential Rental Income
+ Potential Pass-thrus
= Total Potential Income
- Vacancy & Credit Losses @0%
= Gross Operating Income
- Taxes
- Insurance
- CAM
= Net Operating Income
$1,345,000
$553,000
$1,898,000
$0
$1,898,000
$158,000
$118,500
$276,500
$1,345,000
$1,345,000
$566,825
$1,911,825
$0
$1,911,825
$161,160
$120,870
$284,795
$1,345,000
$1,345,000
$581,009
$1,926,009
$0
$1,926,009
$164,383
$123,287
$293,339
$1,345,000
$1,345,000
$595,563
$1,940,563
$0
$1,940,563
$167,671
$125,753
$302,139
$1,345,000
$1,345,000
$610,496
$1,955,496
$0
$1,955,496
$171,024
$128,268
$311,203
$1,345,000
$1,345,000
$625,818
$1,970,818
$0
$1,970,818
$174,445
$130,834
$320,539
$1,345,000
LOCAL CREDIT TENANTS
Potential Rental Income
+ Potential Pass-thrus
= Total Potential Income
- Vacancy & Credit Losses @7%
= Gross Operating Income
- Taxes
- Insurance
- CAM
= Net Operating Income
$372,000
$168,000
$540,000
$37,800
$502,200
$48,000
$36,000
$84,000
$334,200
$384,360
$172,200
$556,560
$38,959
$517,601
$48,960
$36,720
$86,520
$345,401
$397,139
$176,509
$573,648
$40,155
$533,493
$49,939
$37,454
$89,116
$356,983
$410,351
$180,931
$591,281
$41,390
$549,892
$50,938
$38,203
$91,789
$368,961
$424,011
$185,467
$609,478
$42,663
$566,815
$51,957
$38,968
$94,543
$381,348
$438,135
$190,122
$628,257
$43,978
$584,279
$52,996
$39,747
$97,379
$394,157
$1,679,200 $1,690,401 $1,701,983 $1,713,961
$1,726,348
$1,739,157
TOTAL NET OPERATING INCOME
Year 6

27. Property Name
Annual Property Operating Data
HIDDEN LAKES RETAIL
Location
Type of Property
Size of Property
COMMERCIAL
103,000
(Sq. Ft./Units)
CI-104, CASE 3
Purpose of analysis
Assessed/Appraised Values
Land
20
Improvements
80
Personal Property
0
Total
100
Adjusted Basis as of:
23-Oct-13
ALL FIGURES ARE ANNUAL
1
2
3
4
5
7
8
9
10
11
12
13
14
POTENTIAL RENTAL INCOME
Less: Vacancy & Cr. Losses
EFFECTIVE RENTAL INCOME
Plus: Other Income (collectable)
GROSS OPERATING INCOME
OPERATING EXPENSES:
Real Estate Taxes
Personal Property Taxes
Property Insurance
Off Site Management
Payroll
Expenses/Benefits
Taxes/Worker's Compensation
Repairs and Maintenance
19,000,000
200,000
266,000
13,300,000
6,166,000
Purchase Price
Plus Acquisiition Costs
Plus Loan Fees/Costs
Less Mortgages
Equals Initial Investment
20%
80%
0%
100%
Balance
1st
2nd
Interest
Amort
Period
7.5%
20
Gross Rent Multiplier
Periodic Pmt
Pmts/Yr
$13,300,000
#######
12
12
$19,200,000
$/SQ FT
or $/Unit
%
of GOI
1,679,200
COMMENTS/FOOTNOTES
FROM CASH FLOW FORECAST
of PRI )
1,679,200
1,679,200
Utilities:
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
Capitalization Rate
Accounting and Legal
Licenses/Permits
Advertising
Supplies
Miscellaneous Contract Services:
TOTAL OPERATING EXPENSES
NET OPERATING INCOME
Less: Annual Debt Service
Less: Participation Payments
Less: Leasing Commissions
Less: Funded Reserves
CASH FLOW BEFORE TAXES
1,679,200
1,285,727
Cash on Cash
$393,473
Loan
Term
10

28. Cash Flow Analysis Worksheet
Property Name
Prepared For
Prepared By
Date Prepared
HIDDEN LAKES RETAIL
CI-104, CASE 3
23-Oct-13
Mortgage Data
1st Mortgage
Amount
Interest Rate
Amortization Period
Loan Term
Payments/Year
Periodic Payment
Annual Debt Service
Loan Fees/Costs
13,300,000
7.50%
20. Years
10. Years
12
107,143.89
1,285,726.74
266,000
End of Year :
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Potential Rental Income
-Vacancy & Credit Losses
=Effective Rental Income
+Other Income (collectable)
=Gross Operating Income
-Operating Expenses
=NET OPERATING INCOME
-Interest - 1st Mortgage
-Interest - 2nd Mortgage
-Participation Payments
-Cost Recovery - Improvements
-Cost Recovery - Personal Property
-Amortization of Loan Fees/Costs
-Leasing Commissions
=Real Estate Taxable Income
Tax Liability (Savings) at 35.0%
17
18
19
20
21
22
23
24
NET OPERATING INCOME (Line 7)
-Annual Debt Service
-Participatipation Payments
-Leasing Commissions
-Funded Reserves
=CASH FLOW BEFORE TAXES
-Tax Liability (Savings) (Line 16)
=CASH FLOW AFTER TAXES
19,000,000
200,000
266,000
13,300,000
6,166,000
Purchase Price
Plus Acquisiition Costs
Plus Loan Fees/Costs
Less Mortgages
Equals Initial Investment
Cost Recovery Data
2nd Mortgage
12
-
Improvements
Value
C. R. Method
Useful Life
In Service Date
Date of Sale
15,360,000
SL
39
1-Jan-02
December-06
Personal Property
Cost
Recovery
Recapture
Investment Tax
Credit ($$ or %)
Debt Service
Taxable Income
Coverage
Ratio
1,679,200
1,690,401
1,701,983
1,713,961
1,726,348
1,679,200
1,690,401
1,701,983
1,713,961
1,726,348
1,679,200
1,690,401
1,701,983
1,713,961
1,726,348
1,679,200
987,383
1,690,401
964,222
1,701,983
939,262
1,713,961
912,365
1,726,348
883,380
377,395
393,830
393,830
26,600
26,600
26,600
287,822
100,738
305,749
107,012
1
2
3
4
5
Mid-Month
Convention
393,830
377,395
26,600
26,600
342,291
119,802
381,166
133,408
438,973
153,640
Cash Flow
1,679,200
1,285,727
1,690,401
1,285,727
1,701,983
1,285,727
1,713,961
1,285,727
1,726,348
1,285,727
393,473
100,738
$292,736
404,674
107,012
$297,662
416,256
119,802
$296,455
428,234
133,408
$294,826
440,621
153,640
$286,981

29. Alternative Cash Sales Worksheet
Mortgage Balances
End of Year:
Principal Balance - 1st Mortgage
Principal Balance - 2nd Mortgage
TOTAL UNPAID BALANCE
1
13,001,656
$13,001,656
2
3
12,680,151
$12,680,151
12,333,687
$12,333,687
4
11,960,325
$11,960,325
5
11,557,979
$11,557,979
Calculation of Sale Proceeds
PROJECTED SALES PRICE
$19,324,000
(At 9.% cap)
CALCULATION OF ADJUSTED BASIS:
1
Basis at Acquisition
2
+Capital Additions
3
-Cost Recovery (Depreciation) Taken
4
-Basis in Partial Sales
5
=Adjusted Basis at Sale
CALCULATION OF CAPITAL GAIN ON SALE:
6 Sale Price
7 -Costs of Sale
8 -Adjusted Basis at Sale (Line 5)
9 -Participation Payment on Sale
10 =Gain or (Loss)
11 -Straight Line Cost Recovery (limited to gain)
12 -Suspended Losses
13 =Capital Gain from Appreciation
Unamortized
Loan Fees
ITEMS TAXED AS ORDINARY INCOME:
14 Unamortized Loan Fees/Costs (negative)
15 +
16 =Ordinary Taxable Income
CALCULATION OF SALES PROCEEDS AFTER TAX:
17 Sale Price
18 -Cost of Sale
19 +Balance of Funded Reserves
20 -Mortgage Balance(s)
21 -Participation Payments on Sale
22 =Sale Proceeds Before Tax
23 -Tax (Savings): Ordinary Income at 35% of line 16
24 -Tax: Straight Line Recapture at 25% of line 11
25 -Tax on Capital Gains at 15% of line 13
26 =SALE PROCEEDS AFTER TAX
$19,324,000
(At 9.% cap)
$19,324,000
(At 9.% cap)
$19,200,000
$19,200,000
$19,200,000
1,936,280
1,936,280
1,936,280
17,263,720
17,263,720
17,263,720
19,324,000
386,480
17,263,720
19,324,000
386,480
17,263,720
19,324,000
386,480
17,263,720
1,673,800
1,673,800
1,673,800
1,673,800
1,673,800
1,673,800
Toggle the explanatory highlights
Adjusted Basis
(Suggest turn off before printin
(133,000)
(133,000)
(133,000)
(133,000)
(133,000)
(133,000)
19,324,000
386,480
11,557,979
7,379,541
(46,550)
418,450
$7,007,641
Tax on
Straight Line
11,557,979
Recapture
7,379,541
19,324,000
386,480
(46,550)
418,450
$7,007,641
19,324,000
386,480
11,557,979
7,379,541
(46,550)
418,450
$7,007,641

30. Cash Flow Analysis Worksheet
Property Name
Prepared For
Prepared By
Date Prepared
HIDDEN LAKES RETAIL
CI-104, CASE 3
23-Oct-13
Mortgage Data
1st Mortgage
Amount
Interest Rate
Amortization Period
Loan Term
Payments/Year
Periodic Payment
Annual Debt Service
Loan Fees/Costs
19,000,000
200,000
266,000
13,300,000
6,166,000
Purchase Price
Plus Acquisiition Costs
Plus Loan Fees/Costs
Less Mortgages
Equals Initial Investment
Cost Recovery Data
2nd Mortgage
13,300,000
7.50%
20. Years
10. Years
12
107,143.89
1,285,726.74
266,000
12
-
Improvements
Value
C. R. Method
Useful Life
In Service Date
Date of Sale
Personal Property
15,360,000
SL
39
1-Jan-02
December-06
Recapture
Investment Tax
Credit ($$ or %)
Taxable Income
End of Year :
1
2
3
4
5
6
7
Potential Rental Income
-Vacancy & Credit Losses
=Effective Rental Income
+Other Income (collectable)
=Gross Operating Income
-Operating Expenses
=NET OPERATING INCOME
1
2
3
4
5
1,679,200
1,690,401
1,701,983
1,713,961
1,726,348
1,679,200
1,690,401
1,701,983
1,713,961
1,726,348
1,679,200
1,690,401
1,701,983
1,713,961
1,726,348
1,679,200
1,690,401
1,701,983
1,713,961
1,726,348

31. Taxable Income
End of Year :
1
2
3
4
5
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Potential Rental Income
-Vacancy & Credit Losses
=Effective Rental Income
+Other Income (collectable)
=Gross Operating Income
-Operating Expenses
=NET OPERATING INCOME
-Interest - 1st Mortgage
-Interest - 2nd Mortgage
-Participation Payments
-Cost Recovery - Improvements
-Cost Recovery - Personal Property
-Amortization of Loan Fees/Costs
-Leasing Commissions
=Real Estate Taxable Income
Tax Liability (Savings) at 35.0%
1,679,200
1,690,401
1,701,983
1,713,961
1,726,348
1,679,200
1,690,401
1,701,983
1,713,961
1,726,348
1,679,200
1,690,401
1,701,983
1,713,961
1,726,348
1,679,200
987,383
1,690,401
964,222
1,701,983
939,262
1,713,961
912,365
1,726,348
883,380
377,395
393,830
393,830
393,830
377,395
26,600
26,600
26,600
26,600
26,600
287,822
100,738
305,749
107,012
342,291
119,802
381,166
133,408
438,973
153,640
17
18
19
20
21
22
23
24
NET OPERATING INCOME (Line 7)
-Annual Debt Service
-Participatipation Payments
-Leasing Commissions
-Funded Reserves
=CASH FLOW BEFORE TAXES
-Tax Liability (Savings) (Line 16)
=CASH FLOW AFTER TAXES
1,679,200
1,285,727
1,690,401
1,285,727
1,701,983
1,285,727
1,713,961
1,285,727
1,726,348
1,285,727
393,473
100,738
$292,736
404,674
107,012
$297,662
416,256
119,802
$296,455
428,234
133,408
$294,826
440,621
153,640
$286,981
Cash Flow

32. Alternative Cash Sales Worksheet
Mortgage Balances
End of Year:
Principal Balance - 1st Mortgage
Principal Balance - 2nd Mortgage
TOTAL UNPAID BALANCE
1
13,001,656
$13,001,656
2
12,680,151
$12,680,151
3
12,333,687
$12,333,687
4
11,960,325
$11,960,325
5
11,557,979
$11,557,979
Calculation of Sale Proceeds
PROJECTED SALES PRICE
$19,324,000
(At 9.% cap)
CALCULATION OF ADJUSTED BASIS:
1
Basis at Acquisition
2
+Capital Additions
3
-Cost Recovery (Depreciation) Taken
4
-Basis in Partial Sales
5
=Adjusted Basis at Sale
CALCULATION OF CAPITAL GAIN ON SALE:
6 Sale Price
7 -Costs of Sale
8 -Adjusted Basis at Sale (Line 5)
9 -Participation Payment on Sale
10 =Gain or (Loss)
11 -Straight Line Cost Recovery (limited to gain)
12 -Suspended Losses
13 =Capital Gain from Appreciation
$19,324,000
(At 9.% cap)
$19,324,000
(At 9.% cap)
$19,200,000
$19,200,000
$19,200,000
1,936,280
1,936,280
1,936,280
Toggle the
(Sugge
17,263,720
17,263,720
17,263,720
19,324,000
386,480
17,263,720
19,324,000
386,480
17,263,720
19,324,000
386,480
17,263,720
1,673,800
1,673,800
1,673,800
1,673,800
1,673,800
1,673,800

33. CALCULATION OF ADJUSTED BASIS:
1
Basis at Acquisition
2
+Capital Additions
3
-Cost Recovery (Depreciation) Taken
4
-Basis in Partial Sales
5
=Adjusted Basis at Sale
CALCULATION OF CAPITAL GAIN ON SALE:
6 Sale Price
7 -Costs of Sale
8 -Adjusted Basis at Sale (Line 5)
9 -Participation Payment on Sale
10 =Gain or (Loss)
11 -Straight Line Cost Recovery (limited to gain)
12 -Suspended Losses
13 =Capital Gain from Appreciation
ITEMS TAXED AS ORDINARY INCOME:
14 Unamortized Loan Fees/Costs (negative)
15 +
16 =Ordinary Taxable Income
CALCULATION OF SALES PROCEEDS AFTER TAX:
17 Sale Price
18 -Cost of Sale
19 +Balance of Funded Reserves
20 -Mortgage Balance(s)
21 -Participation Payments on Sale
22 =Sale Proceeds Before Tax
23 -Tax (Savings): Ordinary Income at 35% of line 16
24 -Tax: Straight Line Recapture at 25% of line 11
25 -Tax on Capital Gains at 15% of line 13
26 =SALE PROCEEDS AFTER TAX
$19,200,000
$19,200,000
$19,200,000
1,936,280
1,936,280
1,936,280
Toggle the
(Sugge
17,263,720
17,263,720
17,263,720
19,324,000
386,480
17,263,720
19,324,000
386,480
17,263,720
19,324,000
386,480
17,263,720
1,673,800
1,673,800
1,673,800
1,673,800
1,673,800
1,673,800
(133,000)
(133,000)
(133,000)
(133,000)
(133,000)
(133,000)
19,324,000
386,480
19,324,000
386,480
19,324,000
386,480
11,557,979
11,557,979
11,557,979
7,379,541
(46,550)
418,450
$7,007,641
7,379,541
(46,550)
418,450
$7,007,641
7,379,541
(46,550)
418,450
$7,007,641

34. OF
$
(6,166,000)
393,473
404,674
416,256
428,234
440,621 + 7,379,541
9.95%
NPV= $0
@ 9.95%
Alternative 2
n
0
1
2
3
4
5
IRR=
NPV= $0
@ 9.95%
NPV= $0
@ 7.13%
Cap rate used on Sale = 9.%
n
0
1
2
3
4
5
IRR=
$
(6,166,000)
292,736
297,662
296,455
294,826
286,981 + 7,007,641
7.13%
NPV= $0
@ 7.13%
Cap rate on Sale = 9.%
$
(6,166,000)
393,473
404,674
416,256
428,234
440,621 + 7,379,541
9.95%
NPV= $0
@ 9.95%
Alternative 3
n
0
1
2
3
4
5
IRR=
$
(6,166,000)
292,736
297,662
296,455
294,826
286,981 + 7,007,641
7.13%
NPV= $0
@ 7.13%
Cap rate on Sale = 9.%
R E T U R N
$
(6,166,000)
292,736
297,662
296,455
294,826
286,981 + 7,007,641
7.13%
Alternative 3
n
0
1
2
3
4
5
IRR=
AFTER TAX
Alternative 2
Alternative 1
n
0
1
2
3
4
5
IRR=
$
(6,166,000)
393,473
404,674
416,256
428,234
440,621 + 7,379,541
9.95%
O F
RAT ES
Alternative 1
n
0
1
2
3
4
5
IRR=
R A T E S
I NT ERNAL
BEFORE TAX
I N T E R N A L
RET UR N
IRR & NPV

35. How much should I pay?
n
0
1
2
3
4
5
IRR=
$
(6,166,000)
292,736
297,662
296,455
294,826
286,981 + 7,007,641
7.13%
NPV= ($700,388)
@ 10.%
Impressed?

36. Are they really
interested or just
shopping?
How do I get
them to like me
and trust me?
How do I get
them to make a
decision?
What can I do to
make this more
interesting?
Will they
understand the
terminology?
Should I dig into
the details or
keep it simple?
Will they
understand the
lingo?
How much time
will I need to
make my point?

38. CCIM Institute
Note: Do not enter any inf ormation on this sheet.
All values are derived f rom the Input Sheet.
Equipping the world’s best minds in commercial real estate
Cash Flow Analysis Worksheet
Property Name
HIDDEN KAKES RETAIL
Acquisition Price
$19,000,000
Location
Plus Acquisition Costs
Type of Property
Plus Loan Costs
$266,000
Minus Mortgages
$13,300,000
Size of Property (sf/units)
103,000
Purpose of Analysis
$200,000
Equals Initial Investment
$6,166,000
Prepared by
Date Prepared
October 24, 2013
MORTGAGE DATA
1st Mortgage
Amount
COST RECOVERY DATA
2nd Mortgage
$13,300,000
Interest Rate
Improvements
Value
7.50%
BASIS DATA
Personal Property
$15,360,000
C. R. Method
Acquisition Price
SL
SL Acquisition Costs
Amortization Period
20
Useful Life
39.0
Loan Term
10
In Service Date
1-Jan
1-Jan
31-Dec
31-Dec
Payments/Year
Periodic Payment
12
Date of Sale
$107,143.89
Annual Debt Service
12 Months % age
2.564%
11.5 Months % age
$1,285,727
Loan Fees/Costs
Total Acquisition Basis
2.457%
$266,000
TAXABLE INCOME
End of Year
1
POTENTIAL RENTAL INCOME
2
EFFECTIVE RENTAL INCOME
4
GROSS OPERATING INCOME
6
NET OPERATING INCOME
8
-Interest-First Mortgage
9
4
5
6
TOTAL OPERATING EXPENSES
7
3
+Other Income (collectable)
5
2
-Vacancy & Credit Losses
3
1
$1,679,200
$1,690,401
$1,701,983
$1,713,961
$1,726,348
$1,739,157
$1,679,200
$1,690,401
$1,701,983
$1,713,961
$1,726,348
$1,739,157
$1,679,200
$1,690,401
$1,701,983
$1,713,961
$1,726,348
$1,739,157
$1,679,200
$1,690,401
$1,701,983
$1,713,961
$1,726,348
$1,739,157
$987,382
$964,222
$939,262
$912,365
$883,380
-Interest-Second Mortgage
$377,395
$393,830
$393,830
$393,830
$377,395
$26,600
$26,600
$26,600
$26,600
$26,600
15 REAL ESTATE TAXABLE INCOME
$287,823
$305,749
$342,291
$381,166
$438,973
16 Tax Liability (Savings) at 35%
$100,738
$107,012
$119,802
$133,408
$153,640
17 NET OPERATING INCOME (Line 7)
$1,679,200
$1,690,401
$1,701,983
$1,713,961
$1,726,348
18 -Annual Debt Service
$1,285,727
$1,285,727
$1,285,727
$1,285,727
$1,285,727
22 CASH FLOW BEFORE TAXES
$393,473
$404,674
$416,256
$428,234
$440,621
23 -Tax Liability (Savings) (Line 16 )
$100,738
$107,012
$119,802
$133,408
$153,640
24 CASH FLOW AFTER TAXES
$292,735
$297,662
$296,455
$294,826
$286,981
10 -Cost Recovery-Improvements
11 -Cost Recovery-Personal Property
12 -Loan Costs Amortization
13 14 -
CASH FLOW
19 20 21 -

39. CCIM Institute
Note: Do not enter any inf ormation on this sheet.
All values are derived f rom the Input Sheet.
Equipping the world’s best minds in commercial real estate
Cash Sale Worksheet
MORTGAGE BALANCES
1 End of Year:
2 Principal Balance - 1st Mortgage
1
2
3
4
5
$13,001,656
$12,680,150
$12,333,686
$11,960,325
$13,001,656
$12,680,150
$12,333,686
$11,960,325
6
$11,557,979
$11,557,979
3 Principal Balance - 2nd Mortgage
4 TOTAL UNPAID BALANCE
CALCULATION OF SALE PROCEEDS
5 END OF YEAR
1
6 PROJECTED SALES PRICE (Rounded to nearest 000)
2
3
4
5
$19,324,000
CALCULATION OF ADJUSTED BASIS
7 Basis at Acquisition
$19,200,000
8 +Capital Additions
9 -Cost Recovery (Depreciation) Taken
$1,936,280
10 -Basis in Partial Sales
11 =Adjusted Basis at Sale
$17,263,720
CALCULATION OF CAPITAL GAIN ON SALE
12 Sale Price
13 -Costs of Sale
14 -Adjusted Basis at Sale (Line 11)
$19,324,000
$386,480
$17,263,720
15 16 =Gain or (Loss)
$1,673,800
17 -Straight Line Cost Recovery (limited to gain) (Line 9)
$1,673,800
18 -Suspended Losses
19 =Capital Gain from Appreciation
ITEMS TAXED AS ORDINARY INCOME
20 Unamortized Loan Fees/Costs (negative)
($133,000)
21 +
22 =Ordinary Taxable Income
($133,000)
CALCULATION OF SALE PROCEEDS
23 Sale Price
24 Cost of Sale
$19,324,000
$386,480
25 -Participation Payments on Sale
26 -Mortgage Balance(s)
$11,557,979
27 +Balance of Funded Reserves
28 =SALE PROCEEDS BEFORE TAX
$7,379,541
29 -Tax (Savings)on Ordinary Income (Line 22 x 35%)
($46,550)
30 -Tax on Cost Recovery Recapture (Line 17 x 25%)
$418,450
31 -Tax on Capital Gain (Line 19 x 15%)
32 =SALE PROCEEDS AFTER TAX
$7,007,641
6

40. Investment Benchmarks
Legend
CCIM Institute
Input Cells
Equipping the world’s best minds in commercial real estate
Measures of Investment Performance
Before Tax
EOY
0
1
2
3
4
5
IRR =
$
($6,166,000)
$393,473
$404,674
$416,256
$428,234
$440,621
+
$7,379,541
After Tax
EOY
0
1
2
3
4
5
9.95%
NPV @
End of Year
Value Using Acquisition Cap Rate
Loan Balance
Loan to Value
Debt Service Coverage Ratio
Return on Asset
Before Tax Cash on Cash
After Tax Cash on Cash
Acquisition Cap Rate
Gross Rent Multiplier
Effective Tax Rate
$
($6,166,000)
$292,735
$297,662
$296,455
$294,826
$286,981
IRR =
1
$19,127,000
$13,001,656
67.98%
1.31
8.84%
6.38%
4.75%
8.84%
11.31
28.29%
2
$19,258,000
$12,680,151
65.84%
1.31
8.90%
6.56%
4.83%
10.00%
+
$7,007,641
7.13%
NPV @
=
Formula Cells
3
$19,393,000
$12,333,687
63.60%
1.32
8.96%
6.75%
4.81%
4
$19,533,000
$11,960,326
61.23%
1.33
9.02%
6.95%
4.78%
=
5
$19,678,000
$11,557,979
58.74%
1.34
9.09%
7.15%
4.65%
($700,388)
6

41. Discount Rate Sensitivity
EOY 10 Sales Price
Purchase
$4,418,000
Lease
$0
0%
2%
4%
6%
8%
10%
12%
14%
After Tax Net Present Value
($200,000)
($400,000)
($600,000)
($800,000)
($1,000,000)
($1,200,000)
($1,400,000)
6.15%
($1,600,000)
($1,800,000)
($2,000,000)
Discount Rate
16%
18%
20%
22%
24%

42. Sales Price Sensitivity
Discount Rate
9.00%
$0
After Tax Net Present Value
($1,000,000)
($2,000,000)
($3,000,000)
$20,069,6
($4,000,000)
($5,000,000)
($6,000,000)
($7,000,000)
EOY 10 Sales Price (000)
Purchase
Lease

43. Are they really
interested or just
shopping?
How do I get
them to like me
and trust me?
How do I get
them to make a
decision?
What can I do to
make this more
interesting?
Will they
understand the
terminology?
Should I dig into
the details or
keep it simple?
Will they
understand the
lingo?
How much time
will I need to
make my point?

44. REIWISE @ STDB.com

51. planEASE @ www.planease.com

62. The CCIM Millionaire Next Door
An astounding 85 percent of self-made
millionaires in America admitted that they
were no more intelligent or talented then
others, but they “worked much harder”
than anyone else, for a much longer time.
The Millionaire Next Door, Stanley & Danko

63. What can I do?
•
•
•
•
•
•
•
•
•
Qualify and don’t waste anyone’s time
Let them know they’re important
Give your trust & earn their trust
Use all of your knowledge & skills
Avoid jargon
Read and understand your audience
Be brief (you can always elaborate)
Get them involved & use visuals
Ask for the order

65. Thank you for attending!
Steven R. Price, CCIM
Price Properties, Inc.
Colorado Springs, Colorado
steve@stevepriceccim.com