Hey everyone, sorry for the late post, but my Google account
basically locked me out on Friday evening (which meant that every service
associated with Google that I use was not functioning for me).
I think my mentor,
Mrs. Hammond, put it best when she stated "real estate is immensely
interesting because all of the little bits of analysis come together to form a
bigger picture". I spent the entire week geeking out over how to put
together all of the pieces of information that go into a loan request. A loan
request is meant to present all of the information any party making a loan
request for the construction or refinancing of a loan could need; there's the
basics, like location, age of the building (or buildings), occupancy, and so
on. It doesn't just stop there. There's lots of maps which each address a
different scale (city, neighborhood, locality), demographics information, and
sales comparables, among other things. That's not even the coolest part though. I filled out official employment paperwork! I have a company email! And my own desk! I can even go to the bathroom without
signing out- talk about a step up from BASIS life. I've never felt adultier (I know that's not a word-let's just go
with it for the time being) in my life.
It seems to me so
far that I've heard most of the terms that I was hearing on a daily basis
thrown around before, but I suppose I never paid enough attention to realize
that each one is so much more significant than it seems at first glance.
Sales comparables are literally exactly what they sound like: properties that,
on the basis of price, location, and quality, are similar to the property of
interest. After spending a couple hours on Friday making a map of 38 sales
comparables, I learned, or rather saw, that a lot of information is necessary
to make any large financial decisions, even if it takes looking at 38 different
(but often very closely clustered) cases to get an idea of what you're looking
for.
My work throughout the week was learning how to piece together a
loan request, and as such, all of the different documents that are included
have their own creation processes. Even though the loan request that I will
eventually make will be for one deal (which may or may not be the apartment
complex next to the light rail- things are still being negotiated and I'll know
more as time goes on), I practiced by making documents for several different
deals, including an industrial complex and an apartment deal. I worked on the
maps for part of the week, as well as gathering previous tax information on an
apartment deal. Before this, I literally had no idea what an Assessor was, much
less that Maricopa County had one. Navigating his website was easy enough, but
with every piece of information that I came across, I kept asking myself,
"how did he manage to put all of this together in one document?" I
suppose that's another question I'll be able to answer ten weeks from now.
I've also learned to be grateful for that AP Economics class I
took last year impulsively (and by impulsively, I mean that I thought 13 AP
exams wasn't a high enough number and I needed 2 more). I was lucky enough to
know what all of the different taxes mentioned and not to be completely lost as
I read the template loan request Churchill provided me with, but there were
still terms that I have a very shaky idea of what they mean. I guess that leads
to me to what I want to do next week, or at least what I hope to do.
Capitalization rates, among other terms, are still a mystery to me, but so far, they
haven't come up that much in my work. I promise I won't do the thing where I
ignore the problem until I absolutely have to address it, but I have to read at
least a few Investopedia articles before I can say that I understand
everything. Next week will probably be a continuation of this week: I'll make
more parts of loan requests, and, as other deals progress, there's a
possibility that sometime in the near future I will be taking pictures of
properties of interest to be included in the loan requests (I never thought I'd
be thanking myself for taking Digital Photography during freshman year). I
don't currently know what the situation is with the apartment complex I was
talking about in my last post, especially as situations in these deals shift
constantly, but I'll post it here as soon as I know. The takeaways from this
week are:
1. Real estate involves so many minute details coming together to
form a big picture, like an impressionist painting (you know, the ones with the
dots. I was never great at art).
2. Google Maps is overly excited about showing me points of
interest, and I don't know enough code
to overcome it, even after spending at least an hour reading up on JavaScript
and trying several lines of code I found online.
3. I never thought I'd be this excited over gigantic lists of
numbers and clustered points on maps.
Thanks for reading, and see you next week!
