Finance: Cash Flow Analysis
#NARPMSmart Designation and Education Course
Quick Links: Who Should Attend? | Personal Story | Instructors Notes | Course Description
Register to Take In-Classroom
This advanced course is a 6-hour class that counts toward the RMP® and MPM® Designation education requirement.
Anyone that works with landlords will benefit from this class. If you learn how to “speak investor” you will become a much more valuable service provider for your client.
Equipment/Materials Required:
- 4 Function calculator
- Pencil with an eraser
How YOU will Benefit?
By learning cash flow analysis and how to measure your own performance you will be able to better advise and better serve your clients. When you can quantify how your performance is superior, and how your recommendations contribute to a more profitable ownership experience, more clients will seek you out and your existing clients will more highly value your input and advice.
Learning Objectives:
- Identify the different components of Cash Flow Analysis
- Describe how to calculate the income derived from Cash Flow
- Explain how income is derived from Loan Amortization
- Summarize tax considerations and tax “savings to an investor
- Explain how income is derived from Appreciation
- Calculate a budgeted cash flow for a rental house
- Calculate budgeted IRR for a rental house
“At last year’s Convention in Hawaii, I went to the new class, Finance: Cash Flow Analysis, instructed by Mike Nelson, MPM RMP. It was full of great information. These educational classes were perfect to pick up new information. Sometimes, I have even attended the same class multiple times. While I never forgot the class material, I always want to go to the classes again to continue learning, and best of all, to share ideas with other attendees.
One time, I attended a class instructed by Vickie Gaskill, MPM® RMP®, for the second time. When I showed up at her class, she turned to me in surprise. “Dora, are you still taking classes?” By that point, I had been a NARPM® Member for five years. I already had my RMP® and had taken all of the required classes. Smiling, I told her, “Yes, Vickie. I always pick up useful ideas for my business.”
The most profitable idea from any class came from the Finance: Cash Flow Analysis class. In this class, I learned how to run a proper cash flow analysis and project a return on the client’s investment. It combines topics like figuring tax benefits, cash flow, mortgage down payments, appreciation, and equity capture. As a result, we can give our investors a complete picture of what to expect from their investment in two, three, or five years from now.
I left the Convention filled with new ideas and excitement on how my business was going to benefit. When I arrived home from Hawaii, we incorporated all of these ideas into our monthly newsletters. We offered our investors an analysis of their existing properties to help them decide on their best course of action.
This new approach became so popular that we could barely handle the extra workload at first. With all of the analyses and meetings we had to do, we were constantly busy. As a result of this work, we gained a number of impressive results. We appeared more knowledgeable to our customers. The expert advice ensured increased customer loyalty. Additionally, we retained tens of thousands of dollars more from current owners. Previously, they wanted to sell their homes. After seeing the analyses, they realized that waiting would be worth it. Despite the low cash flow, they would still make a return from their properties. We saved our investors from listing their homes and helped them earn money. In return, we profited from having more homes retained with our company.
Our investors now viewed us as the experts, and they were more willing to stay with us. With only one piece of information from the Convention in Hawaii, we made tens of thousands of dollars.”
Instructor Michael E. Nelson GRI, MPM RMP, shares notes on what students can expect by taking this course:
Turn your investor clients into raving fans. Students will learn how to calculate the expected cash flow, loan payments, levered and unlevered internal rates of return for a rental home investment.
Participants will be able to use this information to educate their clients, improve the financial performance of the houses they manage, and increase brokerage business by helping investors buy and sell rental houses successfully. When you can explain to your investors how and why it is in their financial best interests to follow your recommendations, you become their consultant—which is a much easier way to manage.
Some of the topics Finance: Cash Flow Analysis covers include:
- Identify the different components of Cash Flow Analysis
- Describe how to calculate the income derived from Cash Flow
- Explain how to calculate the income derived from Loan Amortization
- Summarize tax considerations to an investor
- Explain how to calculate the income derived from Appreciation
- Explain how to calculate a budgeted Cash Flow for a rental house
- Explain how to calculate a budgeted Internal Rate of Return for a rental house
Learn more about NARPM Instructor Mike Nelson
This advanced course will teach you how to forecast and calculate your client’s cash on cash return and their internal rate of return on their investment properties. You will also learn how to measure your performance and effectiveness as a property manager. Whether your client is a traditional investor or a “frustrated seller”, once the property becomes a rental, it is all about the numbers. Understanding the “numbers” will enable you to advise your clients based on what is in their financial best interests and explain how to forecast that. You can better forecast how a replacement vs. a repair or a rent increase can enhance the property’s value. You move from someone that just collects rent and coordinates repairs to being their consultant.
Register to Take In-Classroom
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