Levered vs. Unlevered Cash Flow in Real Estate

The Income Approach to Commercial Real Estate Valuation

Fundamentally, the value of a commercial real estate asset is derived from the amount of cash flow that the property produces. When evaluating potential returns for a real estate investment, investors may often have to consider levered vs. unlevered cash flows. In this article, FNRP explains the difference between levered and unlevered cash flow in […]

Understanding the Internal Rate of Return

Understanding the Internal Rate of Return in Real Estate

Fundamentally, the idea of making a commercial real estate investment is a simple one.  An individual contributes a certain amount of capital towards the initial cost of an investment property.  In doing so, they expect that they will receive their initial investment back, plus a return over time.  Prior to making an investment decision or […]

Why Part Time Commercial Real Estate Investment Can Be Bad Business

Why Part Time Commercial Real Estate Investment Can Be Bad Business

There is a misconception among individual investors that a commercial real estate (“CRE”) investment is a good way to generate “passive” cash flow.  While it can definitely be a good way to generate income, it is anything but passive.  Commercial properties are large, complex assets and, depending on their size and leasing activity, they can […]