Cultivating strong business relationships with honesty and integrity for the long term are the cornerstone of our business. We want existing clients and future clients of Cornerstone Commercial Mortgage to know that we value your relationship and do not take it for granted.

We strongly believe in the principal "You reap what you sow" therefore, we strive to sow into our clients the utmost in integrity through quality customer service; thereby reaping the rewards of quality friendships and lasting client relationships.

Cap Rate Follies Avoid These Pitfalls When Calculating Commercial Property Values.
By John Simpson, CCIM, MAI, and Eileen Simpson

Capitalization rates are often controversial and misunderstood variables in commercial real estate valuation equations. To value properties, most buyers and sellers prefer an income approach, which analyzes cash flows to determine debt service and investor return - typically the internal rate of return - so it's easy to see why cap rates are scrutinized.

In fact, no other valuation aspect is debated as heavily as cap rates because unsupported data often lead to inaccurate commercial property valuations. By understanding the fallacies that exist, real estate professionals can perform more thorough financial analyses for their clients.

Essentially, a cap rate converts income into value: A property's net operating income is divided by the cap rate, and the resulting figure reflects a return on and of capital. The income approach begins by estimating property income and subtracting a vacancy/collection loss allowance and expenses to achieve the NOI. Then the NOI is divided by the cap rate to obtain the property's value.

Mike Kelley lives on the island paradise of Maui, where he headed after only a year of college on the mainland. He started by selling tanning lotion by the pool. Now, he owns several companies that provide recreation for tourists, as well as business and concierge services for hotels.

Kelley's story proves that, to lead, you often have to take a leap of faith. Here's how it happened:
When he was first trying to expand his business, Kelley wanted an important hotel as a client, but a competitor had held the contract for more than 15 years. One day, Kelley read in a trade journal that the hotel would be change general managers.

Kelley reflected on how hard it would be to get through to the new manager once he arrived, so it would be better to contact him before he moved to Maui from Copper Mountain, Colo. But how? Should he write a letter? Call?

Instead, Kelley threw together a business proposal and jumped on a plane the next night. Once in Colorado, he drove two hours arriving unannounced at the general manager's office. He introduced himself, congratulated the fellow on his move up, said he looked forward to having him in Maui and asked if he could take a few minutes to pitch his services.

Kelley didn't get the contract right there, but his enthusiasm and the self-confidence he showed by flying several thousand miles on the chance of meeting a potential client left such an impression that when the general manager did arrive in Hawaii, Kelley nailed the deal. Over the 15 years since then, it's been worth hundreds of thousands of dollars to his bottom line.

Adapted from the Success Principles, Jack Canfield, HarperResource.

Cornerstone Commercial Mortgage specializes in commercial real estate finance. We act as mortgage consultants, focusing on providing the appropriate financing solutions for each client. We work with investors and developers on all product types from Land loans to permanent loans providing the best financing option available.

John P. Lloyd, President/Owner
Phone: (702) 385-2658
Cell: (702) 379-3468
Email: john.lloyd@cmlv.net