Cash Flow is the watch word for the lenders these days, if a project is cash flowing and the property appraises then the lenders are getting the deals closed.
However when yo are determining cash flow for your prospective client speak to the lender first, find out what expenses the subtract from the gross income to determine Debt Service Coverage Ratio . Each lender will calculate this important ratio very differently based on their experience with the locale as well as the type of property loan being requested.
TILC as well as management fees are GOING to be higher than the current sellers cash flow that your client will be basing their Return on Investment on.
Oh by the way TILC is Tenant Improvement and Leasing Cost.
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