12 Aug Value Add Accounting with Telma Landhorian – CREPN #53
Commercial Real Estate value is simple. What’s the Net Operating Income? If you don’t keep up with market rent and expenses, your property’s value will suffer. Value Add Accounting is an easy way to increase the NOI and the value of your property. [x_audio_embed][/x_audio_embed] SUBSCRIBE iTunes Stitcher Telma Landhorian is a CPA & MBA with experience in Commercial Real Estate. She makes the case for an outsider’s professional review. One client gained $20M additional valuation after working with Telma. Real Estate investing can be so lucrative that even if your bookkeeping is sloppy, you can make money. You know this to be the case when the selling broker’s listing offer is missing actual and “trailing 12” expenses and uses “underwriting average”. If the numbers can not verified, the value is suspect. The primary goal of investing is increase value and not lose money. The next goal is to generate a cash flow, a return. In order to grow a portfolio, operations have to be delegated, and outsourced. This includes property management. The goal of property management is to keep the units rented and the property maintained. In larger primary markets, professional property management firms compete for clients. To compete, they have to provide valued services. It is the market. These firms tend to provide more comprehensive reporting and the ability to control expenses and NOI. Investors with properties in secondary, tertiary and rural markets, will likely have less qualified competition for property management. At this level, there is a lack of accounting sophistication and consequently cost controls are likely to not be present.