Attend the Commercial Real Estate Seminar OnDemand with Live Streaming from the convenience of your own office or home via Live Streaming Video as it happens on Wednesday, June 23rd and Thursday, June 24th (9:00 am – 4:00 pm Central Time), or at your own convenience with 6 months of OnDemand playback.
Want to get a comprehensive look at CRE lending and appraisals in a two-day program? Here it is. The first day will cover key analytical concepts in evaluating real estate cash flow and related non-financial factors or risks. It also explores where to find information from existing sources, such as tax returns, and what additional information may be needed, such as customer rent rolls. We’ll demonstrate stress-testing of your cash flow results, plus how to use a capitalization (cap) rate along with those results to make an important estimate of current value. As a final step, we’ll cover key issues with commercial lease structures.
The second day is devoted to reviewing and interpreting property appraisal. Fundamental principles and features of commercial appraisals are covered, as well as the primary analytical techniques such as net operating income (NOI) for basic, income-producing properties. This class will also provide an overview of the 2010 Interagency Appraisal and Evaluation Guidelines and the 2018 Frequently Asked Questions on the Appraisal Regulations and the Interagency Appraisal and Evaluation Guidelines, with tips for integrating the Guidelines and FAQs into your existing policies, plus other practical issues that banks face, including a brief look at high volatility CRE (HVCRE).
The "Commercial Real Estate Seminar OnDemand with Live Streaming" has been approved for 7 CERP credits. Credits are redeemable for Live attendance only. Users must connect to the streaming individually and enter their name and email for reporting purposes. Accreditation is valid for one year from the date of the event. To receive a certificate, email Streaming@ttsTrain.com.
Day 1: CRE Lending: Cash Flow, Cap Rates and Other Factors Seminar - Wednesday, June 23rd
- Net operating income (NOI) concepts
- Understanding key variables: vacancy, management fees and replacement reserves
- Capitalizing the NOI to estimate value (direct capitalization and cap rates)
- Using tax returns and customer rent rolls
- Unique characteristics of the major types of commercial real estate
- Stress-testing of debt service coverage (DSC) and determining break-even vacancy and interest rate
- How to use a simple worksheet to explore the major issues
- Recognizing other underwriting risks such as construction risk and lease overhang
- Tips for reviewing commercial leases and key items to look for
Day 2: CRE Appraisals: Reviewing & Interpreting Seminar - Thursday, June 24th
- Why review appraisals? (Beyond regulatory requirements)
- Types of reviews
- 14 review points from FIRREA
- What is FIRREA? (and other current regulatory guidelines, including latest appraisal guidelines issued in 2010 and FAQs issued in 2018)
- The five minimum standards (derived from FIRREA), and what they really mean
- Partial exemptions, full exemptions and minimum standards for the report
- A sample compliance review checklist
- Technical/internal (and typical commercial appraisal sections)
- Letter of transmittal
- Appraiser qualifications
- Types of appraisals by scope (2006 scope of work rule that revised old definitions of complete and limited)
- Types of appraisals by format (2014 revisions to old definitions of self-contained, summary and restricted use)
- Assumptions and limiting conditions
- Property identification and ownership interest
- Unique characteristics of the major types of real estate, and how these affect the appraisal
- Approaches to value
- How the cost approach works
- The direct capitalization method for the income approach: net operating income (NOI) concepts and understanding key variables of vacancy, management fees, replacement reserves and capitalization (cap) rates
- Direct sales comparison
- Reconciliation of values and value conclusion
- A sample technical review checklist
- Outside/third party
- How appraisers self-regulate via the Uniform Standards of Professional Appraisal Practice (USPAP) and state licensing
- Getting another appraiser to do the review under USPAP 3 guidelines and sample review comments
- Appraisal review outcomes: When to request revisions
- Using your analysis to validate existing or older appraisals, with a suggested format for documenting your conclusions
Who Should Attend?
CRE lenders, commercial lenders, credit analysts, mortgage lenders, private bankers, small business lenders, loan review specialists, special assets officers, lending managers and credit officers involved in the CRE lending process. Also intended for support personnel involved in the ordering and reviewing of commercial appraisals.
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