Wayne Courreges IIIManaging Principal, CREI Partners, CREI Partners, CREI Partners, LLC · Disciplined Passive Real Estate. Transparent Leadership.

Unlocking Wealth: Wayne's Guide to Real Estate Appreciation

Name: Unlocking Wealth: Wayne's Guide to Real Estate Appreciation
Uploaded: 2025-01-11T01:01:03+00:00
Duration: 49 s
Channel: Wayne Courreges III
Description: A short real-estate presentation explaining 'forced appreciation'—sponsors improving assets to raise rents and passive income—and contrasting residential…

11 Jan 2025 · 1 min

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0:49

A short real-estate presentation explaining 'forced appreciation'—sponsors improving assets to raise rents and passive income—and contrasting residential valuation (comparables/neighborhood sales) with commercial valuation (based on income). Uses an example comparing a single-family home’s comparable-based value to commercial properties producing $100,000 vs. $200,000 in income.

Chapters

Forced appreciation is when the sponsor makes improvements. That allows an increase in the rental rates and therefore an increase in the passive income you're receiving from that asset. While residential real estate is largely valued based on the community and surrounding property values, commercial assets are valued based on income that they can generate. As an example, consider a single family home. How do you know how much a single family home is worth while you look at its neighbor? How much did that house down the street sell for? Okay, well, the chances are this single family home is worth about the same. On the other hand, consider a commercial property that generates, let's say, $100,000 in income. Since commercial properties are valued based on the income they generate, this property, no matter its location or size, is worth far less than one that generates 200,000 of income, even if they are right next to each other.