Coding and Normalizing Commercial Real Estate Operating Statements

Course overview

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Version

This is version 1.3, issued 12 November 2026. The version number is on the cover and at the foot of every page of the PDF. When the course changes, the number changes, so you can tell which copy you hold.

Version	Issued	What changed
1.3	12 November 2026	Revised from the marked-up copy of version 1.0 that BREC returned. Spreading is now called Coding, and a review is now an analysis. The CREFC matrix is named as the source of the codes and the adjustment rules. Every loan is analyzed annually; the watch-list and quarterly rules are removed; the variance threshold is 15 percent. Reasons are now comments, and a line that stays unclear goes to the Manager. A partial-year statement is annualized to 12 months, per the lender’s requirements, and the management fee uses the industry rate. Base rent is coded BR, not GPR. Category names are capitalized.
1.2	3 November 2026	Every statement line now has its own code; coding adjacent lines together as a group is removed, and lines with the same code add up on the lender’s form. Module 4 gains a lesson on looking a line up in the coding matrix, step by step, including what to do when no row matches. The table that says which cell each code is written into is named the form crosswalk. The worked example and the practice case show each utilities line coded separately.
1.1	2 November 2026	Further study (Appendix E) now lists free reference documents from Fannie Mae and Freddie Mac, and three background articles. The modules are unchanged.
1.0	2 November 2026	First issue, for review by experienced analysts.

This is a self-study course for a new analyst who will turn borrowers' operating statements into standard, comparable analyses for commercial real estate lenders. No technical background is needed. You read a little, try a little, check yourself, and move on. All figures are invented.

Learning outcomes

After this module you will be able to:

explain Coding and Normalizing, and where each sits in a review;
read an operating statement and give every line its standard code;
make the standard adjustments, each with a reason;
read the variance against the prior year and write a comment a lender can use;
check a rent roll against screening thresholds;
complete the worksheet and lender form, deliver them, and keep a record;
know when to ask, and whom.

▸How the course works

Every module follows the same pattern, so you always know where you are.

You will see	It is for
Learning outcomes	What you can do after the module. Read them first; check them last.
Key concept	The idea to hold on to.
Worked example	A complete case, with the working shown.
Common errors	Mistakes that new analysts make.
Practice	A short question. Answer it first, then open the solution.
Check your understanding	Questions at the end of a module. Choose an answer to see the reason.
Exhibit	A diagram or table, numbered through the course.
Module summary	The few points to remember.

▸Course map

Module	Title	After it you can
1	The work and its vocabulary	Say what Coding and Normalizing are, and where they sit in a review.
2	Intake	Tell what should have arrived and been confirmed before you start.
3	Reading and Coding	Read an operating statement and give every line its standard code.
4	The standard's codes	Look a line up in the coding matrix, decide one that has no row, and say what each code group means, what is dropped and where the traps are.
5	Normalizing	Make the standard adjustments, each with a reason.
6	Judgment	Work through a line that does not fit, instead of guessing.
7	Variance and comments	Read the change from the prior year and write a comment a lender can use.
8	Rent roll review	Check occupancy and lease expiry against screening thresholds.
9	Completing and delivering	Finish the worksheet and lender form, deliver, and keep a record.
10	Practice case	Do a whole review on paper and compare your answer.

▸Suggested study plan

Session	Read	Do
1	Modules 1 and 2	Explain the journey of a review aloud, in your own words. Check your understanding, modules 1 and 2.
2	Modules 3 and 4	Practice questions. Study Exhibit 7 (the worked example) without opening the solutions.
3	Modules 5 and 6	Do the adjustments in the practice case (Module 10).
4	Modules 7 and 8	Variance and rent roll examples. Finish the practice case.
5	Module 9, Appendix B	Fill in the checklists for the practice case.
6	Appendices A and C	The exercises, the self-check, then explain the work to a colleague.

For reviewers

This is a draft for experienced analysts to correct. Where anything differs from how the work is really done, or from a lender’s rule, please mark it. What is corrected is what the final course teaches. Practice that varies by lender or by firm is collected in a separate list of questions that goes with this draft.

Three ways to review it. Mark up the PDF, write comments, or record yourself going through the course the way a new analyst would and say what you would change. Any one of these is enough.

Module 1

The work and its vocabulary

Learning outcomes

After this module you will be able to:

define Coding and Normalizing, and say which one comes first;
describe who does what in one annual review, from the borrower to the lender;
say what the reporting standard fixes, and what a lender can change;
state when statements arrive and which loans are reviewed more often.

1.1The work in context

A commercial real estate loan servicer looks after loans on behalf of lenders. Once a year, the borrower sends an operating statement for the property. The analyst turns it into a normalized statement of the property’s income and expenses and fills in the lender’s own form. The completed form is the analysis the lender receives.

In plain words

The borrower tells you what the property earned and spent. Your job is to restate in the lender's template, so that this property's performance can be compared with its previous years' performance. You do not change what happened. You make adjustments/eliminations and you explain why. You explain any large variances from the previous year.

1.2Coding and normalizing

Two words describe the core of the work. Learn them first; the rest of the course is practice at them.

Coding: Coding each line of the borrower’s operating statement using the CREFC coding matrix. Giving a line its standard code is how you identify what income or expense field it maps to on the lender’s form.
Normalizing: Restating the coded figures to the CREFC coding matrix rules, which includes our comments on any adjustments we make.

Coding comes first. You cannot normalize a line until you know what kind of line it is.

1.3One analysis, start to finish

An analysis pertains to one loan and one year. The loan lasts for years; the analysis does not. Exhibit 1 shows who does what. The analysis process begins when the required documents have been received.

Exhibit 1. Who does what in one annual analysis

Source: the review described in this module. The highlighted lane is yours.

1.4How the information changes form

Exhibit 2 follows the same review from the point of view of the information. Four inputs, shown dashed, tell you what the answer should look like at each stage.

Exhibit 2. How the information changes form

Source: the review described in this module.

1.5The reporting standard

The vocabulary belongs to the industry’s reporting standard from the CRE Finance Council (CREFC). The matrix assigns the codes and the rules.

1.6The year

Statements arrive mainly in the first quarter of the calendar year for December year-ends. That is the busy season.
Annual Analysis is completed for all loans. All loans need variance comments, where applicable.
Each lender is different. Each has its own form and its own list of required documents. The variance threshold will be set at 15% for all lenders.
Lenders send a new version of their form from time to time. Management will maintain the most recent lender forms in the Interface.

In your own words, what is the difference between the borrower’s statement and the completed analysis?

The statement is the borrower’s own account of income and expenses. The completed analysis is the lender’s form, filled in with the normalized figures, after your codes, adjustments and comments.

Check your understanding

1. What does Normalizing do? Select all answers that apply.

b. Borrowers report their own way. The lender wants comparable figures. Normalizing changes how the figures are described, not what happened. Also “c”.

2. Which of these is coding?

a. Coding is giving each line its standard row and code. Adding up is arithmetic; the comment comes later.

3. How often is a loan analyzed?

a. Every loan’s year-end statement is analyzed annually. Quarterly statements are required based on poor performance and/or a loan document requirement and no analysis is submitted to the lender.

Module summary

An analysis pertains to one loan and one year.
The work has two parts: Coding (Identifying each statement line in preparation to map it to the lender’s standard rows) and Normalizing (adjusting, with a reason & comment).
The completed lender form is the analysis. The borrower’s own statement stays as it was reported.
The CREFC matrix assigns the codes and the rules.

Key terms. Coding · Normalizing · analysis · CREFC

Module 2

Intake: what arrives and what to confirm

Learning outcomes

After this module you will be able to:

list what should arrive for a review, and from whom;
name the checks made before an analyst starts;
say who closes a gap when something is missing or wrong.

2.1What arrives

For each review the servicer receives the borrower’s operating statement and a rent roll, together with any supporting documents the lender requires. They come from the borrower or the property manager, in different forms: some are scanned, some are spreadsheets, some are PDFs. Each lender has its own list of required documents.

2.2What is confirmed before you start

Intake is done by AI Agent and/or the analyst. It confirms, for each review:

the lender, the loan number, the reporting year or quarter, and how the documents arrived;
that the files open, and that there is text to read rather than a blank scan;
that the property type is in the loan portfolio, because the property type decides which codes apply;
that the documents this lender requires have all arrived.

These checks explain why a review is, or is not, ready for you.

2.3Who handles missing data

Missing data belongs to the analyst assigned to the loan. The analyst must seek to obtain the missing document(s) from the borrower/property manager; a wrong loan number is the analyst’s to correct. Do not start coding from an incomplete or unreadable copy, and do not fix missing data by guessing.

2.4The lender’s form

Each lender supplies its own form. When a lender sends a new version, check which version applies to the year you are working on. Prior year analyses keep the form they used that year.

A statement arrives as a scan with no readable text. What do you do?

Raise it with the analyst before you start, so a readable copy is obtained. Do not code from a copy you cannot read.

Check your understanding

1. Which of these is an intake check?

a. Intake confirms what has arrived and what the loan portfolio says, before coding starts. Coding and comments are the analyst’s work.

2. A lender-required document has not arrived. Whose responsibility is it to obtain it?

b. A missing document is the borrower’s to supply. Analysts ask; the analyst does not guess.

Module summary

Intake confirms the loan, the period, that the files can be read, the property type, and that the required documents are present.
Missing documents are obtained by the analyst assigned to the loan. Do not code from an incomplete copy.
Each lender supplies its own form; check the version.

Key terms. operating statement · rent roll · loan portfolio · property type

Module 3

Reading and coding an operating statement

Learning outcomes

After this module you will be able to:

describe how an operating statement is organized from income (top) to expense (bottom);
give every line its own standard code, and explain why its section matters;
say why subtotals are never coded;
change a code and write a reason that says why;
split a combined line, or add a missing one, keeping the totals right.

3.1The shape of an operating statement

Every operating statement is built the same way, regardless of the borrower’s style: income, then expenses, then the result. Exhibit 3 shows the build with the figures from the example in Module 5.

Exhibit 3. From base rent to net operating income

Source: the example in Module 5. Figures are invented.

3.2One line, one code

Coding gives each statement line its own standard code. The borrower’s statement is shown in the borrower’s own order, with the borrower’s own account numbers. The account numbers belong to the borrower; the CREFC matrix codes are letters, never numbers.

Every line is coded on its own. Lines are never coded together. Several lines can end up with the same code, as when electric, water and sewer all code to utilities. Each of the three keeps its own code, and each stays visible on the statement. Later, on the lender’s form, the lines that share a code add up into the one row for that code.

In plain words

The borrower’s statement is a messy drawer. The CREFC matrix is the labeled tray(s) you will sort it into.

Common errors

Coding a subtotal. Subtotals are shown but never coded; you code the lines above the subtotal.
Ignoring the section a line sits in. “Common-area charges” in revenue is a reimbursement; in expenses it is a cost of upkeep. The section is part of a line’s identity.

The statement shows a line “Total Utilities”. Do you code it?

No. Subtotals are shown and never coded. You code the lines above the subtotal.

3.3Changing a code, and saying why

If a code looks wrong, change it and give a reason. The change, the reason, and who made it should be noted. A reason is a note to your future self and to whomever reads the file in the future.

A reason that only restates the new code (“changed to Capital Expenditures”) tells nobody anything. Comment what you checked, who told you, and why that determines the code.

Write a reason for moving a large “Roof repair” from Repairs and Maintenance to Capital Expenditures.

“Property manager confirmed a one-time roof replacement; no roof item in the prior year. Moved to Capital Expenditures.” It says what you checked, who told you, and why that determined the code.

3.4Splitting and adding lines

A statement line that combines two things can be split into two or more lines, using the amounts on the statement or from the borrower. A line that was missed can be added manually. A statement that covers more than the loan’s collateral has to be edited manually.

After a split or an added line, the totals must still equal the statement. Check the subtotal.

A line reads “Repairs and Insurance $57,000”. What now?

Split it into two lines with amounts that add to $57,000, using the amounts obtained from the borrower, then code each.

Check your understanding

1. “Common-area charges” appears in Revenue and again in Expenses. How many codes will be used?

b. Billed to tenants in Revenue, it is a Reimbursement. In Expenses it is a cost of upkeep.

2. A line “Total Operating Expenses” appears on the statement. What do you do?

b. Subtotals are shown and never coded.

3. After you split a line, what must you check?

a. A split must not change the total. Check the subtotal.

Module summary

A statement is organized from Income to Expenses to Net Operating Income; Capital Expenditures items sit below the line.
Each line gets its own code; lines with the same code add up on the lender’s form; section is part of identity; subtotals are never coded.
Every change of code carries a reason that states why the code was changed.
After a split or an added line, totals must still equal the statement.

Key terms. code · subtotal · Net Operating Income · Capital Expenditures items

Module 4

What the CREFC matrix’s codes mean

Learning outcomes

After this module you will be able to:

look a line up in the coding matrix, step by step, and read the result;
decide a line whose label has no row in the matrix, and write the comment;
name the Income and Expense categories every borrower line is sorted into;
say what is eliminated, and what is flagged as a one-time expense or non-recurring item;
say where property type changes the answer;
avoid the traps that catch new analysts.

This module is the industry standard’s mapping in plain words. A lender’s agreement or a servicer’s own practice may differ in places; where it does, follow the agreement that applies and comment.

4.1How the matrix works

The coding matrix maps each borrower line name to one standard code, for each property type. It has two sheets, one for income and one for expenses, and a column for each property type. A row is a line name. A cell is what the matrix says about that line name for that property type. A cell holds one of four results:

a code: the line goes to that standard category;
ELIMINATE: the line is dropped from operating statement, because it is not an operating item;
flagged for adjustment: the normalized column treats the line specially, because it is a one-time expense or non-recurring item. Some cells give a code together with the flag; some give the flag alone;
blank: the CREFC matrix does not expect this line for that property type.

4.2Looking a line up in the matrix

Every line is looked up the same way. A person does it with the matrix open; an automated coder does it by rule. The steps, and the rule behind each, are the same.

Pick the sheet. Income lines use the income sheet and expense lines the expense sheet. The sheet comes from the section of the statement the line sits in: look at the heading above it. The same line name can have different results on the two sheets.
Pick the property-type column. Use the property type in the loan portfolio, never a guess from the statement.
Make the label plain, then look it up exactly. Ignore capital letters. Treat any run of spaces as one space. Ignore spaces beside any of these marks: / & - ( ) , . : ; So “Broker Commission / Fees” reads the same as “broker commission/fees”. Then find the row with that name. Nothing looser: a row that is only similar, a shortened name or a name with an extra word does not count as the same label.
Read the result in that row and column. It is a code, ELIMINATE, flagged for adjustment, or blank. Exhibit 4 says what to do with each.
If no row has that label, there is no result to read. This is the common case. Decide the code yourself from the CREFC matrix’s definitions (the category tables in this module) and from the section the line sits in, and write the comment: what the line is and why that category fits. If you cannot decide, ask rather than guess (Module 6).

Exhibit 4. What to do with each result

Result	A person	An automated coder
A code	Give the line that code.	Gives the line that code, with no person involved.
ELIMINATE	Drop the line from the analysis and write the comment.	Drops the line, with no person involved.
Flagged for adjustment, with a code	Give the line the code, and treat it as an adjustment in the normalized column.	Sends the line to a person, unless a normalization rule for that code has been set up, such as a stated cap on management fees.
Flagged for adjustment, no code	Choose the code from the definitions and the section, then adjust.	Sends the line to a person.
Blank	A finding, not a gap: the CREFC matrix says this line cannot occur for this property type. Write what you see and the comment for the code you choose.	Records the finding. It does not send the line to a person.
No row has the label	Decide from the definitions and the section, and write the comment.	Sends the line to a person.

Source: the coding matrix and the lookup described in this lesson.

What to expect

Most lender statements use their own wording, so most labels have no row in the matrix. In a first measurement on statements it had not seen, a lookup of this kind coded only about 11 to 14 percent of lines outright; the other lines were sent to a person. Deciding a line that has no row is therefore the main work of coding, not a rare case.

Common errors

Taking a nearly matching row. If the label is not the same after the plain-label step, there is no row. Decide the line yourself.
Looking the line up on the wrong sheet because the section was misread.
Looking it up in the wrong property-type column.
Writing no comment when the line had no row. Your comment is what the next person sees.

A retail statement has an expense line “Electric / Gas” and the expense sheet has a row “electric/gas”. Is that a match?

Yes. After the plain-label step, capital letters and the spaces beside the slash are ignored, so both read “electric/gas”. Read the result in the retail column.

A line “Site sundries” is under expenses and has no row in the matrix. What do you do?

There is no result to read. Decide from the definitions and the section: it is an operating expense that fits no named category, so it most likely goes to Other Expenses. Write the comment, for example: “No matrix row; general site costs with no better category, so Other Expenses.” If you could not tell what the cost was, ask before choosing.

4.3Income Categories

Exhibit 5. Income Categories

Categories	In plain words	Property types
Gross Potential Rent	Maximum Possible Rent if every space were leased at market rents	All except Lodging
Vacancy Loss	Rent given up through empty space, concessions and/or abatements	All except Lodging
Base Rent	Contract rent actually billed, including escalations	Multifamily and Commercial
Expense Reimbursements	Tenants paying back building costs, such as common-area, tax and utility charges	Commercial only
Percentage Rent	Rent tied to the tenant’s sales	Retail and Mixed-Use
Laundry and Vending	Coin and vending income	Multifamily (Vending is Other Income for Commercial)
Parking	Parking and Garage Income	Most; Other Income for Industrial and Self Storage
Other Income	Operating Income with no better home: fees, forfeited deposits, bad debt, miscellaneous	All
Lodging and Health Care Revenue	Rooms, food and beverage, telephone; resident pay, government reimbursement	Lodging and Health Care only

Source: the industry standard’s operating statement codes, paraphrased.

4.4Expense Categories

Exhibit 6. Expense Categories

Categories	In plain words
Real Estate Taxes	Property tax only. Nothing else is included.
Property Insurance	Hazard, flood, liability and other coverage(s) on the property
Utilities	Power, gas, water, sewer and trash removal
Repairs and Maintenance	Upkeep, contracts, supplies, landscaping, elevators, heating and cooling (HVAC)
Janitorial	Building cleaning, Commercial only
Management Fees	The property manager’s fee, including asset Management Fees. The Management Fee cap applies to this category. (ie...3% or 4% of EGI is most common)
Payroll and Benefits	On-site staff, their taxes and benefits, contract and temporary labor
Advertising and Marketing	Leasing and promotion costs
Professional Fees	Legal, accounting, engineering, architectural
General and Administrative	The big catch-all: office, phone, travel, security, licenses, vehicle maintenance/mileage, other admin
Ground Rent	Payments on a land lease
Leasing Commissions and Tenant Improvements	The cost of signing tenants, commercial only
Capital Expenditures	Replacements and Reserves; Reserve Deposits and Repair Escrows; Appliance Replacement (for Multi-Family)
Other Expenses	What may not fit in any other category

Source: the CREFC Matrix operating statement codes, paraphrased.

Lodging and Health Care have their own cost lines (franchise fees, departmental expenses, housekeeping, meals).

4.5What is eliminated and what is flagged

Eliminated. Debt service, non-cash accounting entries, owner-level items and pass-through taxes are not operating income and expenses, so they are eliminated. In practice these incomes could include: straight-line lease income, gain on sale, interest income, sales tax collected. For expenses, these could include depreciation, amortization, interest, loan principal, financing fees, owner draws, and sales tax paid.

Flagged as an adjustment. One-time expense or non-recurring item: bad debt (for every type except residential), insurance proceeds, rent from a past tenant, security deposits, prepaid rent and rent loss. You will adjust these items in the normalized column in the analysis.

4.6Where property type changes the answer

Broker fees: Coded as Leasing Commissions for office, retail, industrial and mixed use; Coded as General and Administrative for the others.
Cleaning: Coded as janitorial for commercial types; Coded as repairs for multifamily, self storage and lodging.
Reimbursed building charges: Coded as expense reimbursements for commercial; Coded as ordinary other income for multifamily.

4.7Traps

Traps

Ad valorem and personal property taxes go to general and administrative, not real estate taxes. A borrower whose tax line is named otherwise can leave real estate taxes short, which matters because taxes are normalized separately.
Concessions and rent abatements are vacancy, not negative rent.
Asset Management Fees land in Management Fees, so they count against the Management Fee cap.
Reserve and escrow deposits are Capital Expenditures items, not operating expenses.
A blank cell means the CREFC matrix does not expect the line for that property type. It is a finding. Code it manually and comment the reason.

An office operating statement has a line “Cleaning” and a line “Trash removal”. Where does each go?

Cleaning goes to Janitorial, because the property type is Commercial. Trash Removal goes to Utilities, not Repairs.

The borrower reports “Personal Property Tax $12,000” and a separate “Real Estate Taxes” line. What do you check?

The personal property taxes map to General and Administrative under the CREFC matrix.

Check your understanding

1. A line “Ad valorem tax” appears next to “Real Estate Taxes”. Under the CREFC matrix it maps to:

b. Ad valorem and personal property taxes are coded to General and Administrative.

2. Rent Concessions on a retail property are:

b. Concessions and abatements are coded to Vacancy Loss, not Negative Rent.

3. A line’s label matches no row in the matrix. What do you do?

b. Only an exact match, after the plain-label step, counts. With no row, you decide from the definitions and the section, and the comment is part of the answer.

4. Which comes first when you look a line up?

b. The section tells you the sheet (income or expense); the loan portfolio gives the property type; then the label; then the result.

5. A borrower deposits money into a replacement reserve. How is it coded?

b. Reserve and Escrow Deposits count as Capital Expenditures, not Operating Expenses.

Module summary

Subtotals are shown and never coded.
Ad valorem and personal property taxes are coded as general and administrative, not real estate taxes.
Reserve and Escrow Deposits are coded as Capital Expenditures. Personal and entity-level expenses are eliminated, with a comment.
Concessions and abatements are coded as Vacancy Loss, not Negative Rent.
Property type can change the answer for commissions, cleaning and reimbursed charges.
Look a line up in five steps: sheet, property type, plain label with an exact match, result, and your own decision with a written comment when no row matches.

Key terms. CREFC coding matrix · lookup · ELIMINATE · flagged item · blank cell · ad valorem tax · Capital Expenditures

Module 5

Normalizing: the adjustments

Learning outcomes

After this module you will be able to:

explain why a statement is normalized;
make the five common adjustments, each with a comment;
annualize a partial-year statement;
read a coded-and-normalized statement line by line.

5.1Why normalize?

A borrower reports income and expenses their own way. The lender wants every analysis in the same format. The analyst’s judgment is reflected in the adjustments and in the written comment for any change. In the example below, the adjustments change Net Operating Income by about 7.7 percent.

In plain words

Adjusting is not fixing the borrower’s books. It is putting every analysis in the same format so a lender can compare. Adjustments can raise or lower income or expenses.

5.2The CREFC Matrix adjustments

These are the adjustments you will make the most. The CREFC Matrix also has other rules; the lender’s agreement can vary them.

Taxes and Insurance

Actual values used for taxes/insurance due and paid in the reported year. Any prior year values are excluded. BREC has separate rules for items paid from escrow.

Management Fee

Adjusted when the borrower’s fee does not fall in the BREC standard of ‘between 3 and 4 percent.’ A low fee understates cost and it should never be below the fee used at underwriting.

Entity-level and personal expenses

Eliminated. Owner draws and an owner’s personal retirement contribution are examples.

One-time Items (Non-Recurring Income or Expenses)

A roof replacement moves out of Repairs to Capital Expenditures. Other one-offs, such as a tax appeal refund, a lease buyout, insurance proceeds or rent for an earlier period are additional examples of these.

A Partial-Year Statement

Annualized only if it is less than 12 months. Eight months of income of 800,000 becomes 1,200,000 (800,000 × 12 ÷ 8). Lenders require a full 12-month operating statement.

The Management Fee is $24,000 on income of $1,210,000 and the industry rate in this example is 3 percent. What is the adjustment?

3 percent of $1,210,000 is $36,300. The adjustment is +$12,300.

5.3An Example

An office property. The codes are the CREFC Matrix’s codes; the third column is what the borrower reported, the fourth is the adjustment, and the fifth is the result. Cover the right-hand columns with your hand, decide the adjustment for each line, then compare.

Exhibit 7. A statement, coded and normalized

Line	Code	Borrower actual	Adjustment	Normalized
Base Rent	BR	1,200,000	0	1,200,000
Vacancy and Credit Loss	VAC	(90,000)	0	(90,000)
Common-Area Charges billed to tenants (revenue section)	ER	85,000	0	85,000
Late Fees and Other	OI	15,000	0	15,000
Effective Gross Income		1,210,000	0	1,210,000
Real Estate Taxes (includes 20,000 of the prior year’s delinquency)	RET	150,000	(20,000)	130,000
Insurance (escrowed, actual)	PINS	36,000	0	36,000
Water	UTL	22,000	0	22,000
Sewer	UTL	14,000	0	14,000
Common-Area Electric	UTL	28,000	0	28,000
Repairs and Maintenance (includes a 40,000 one-time roof replacement)	R&M	70,000	(40,000)	30,000
Management Fee (industry rate in this example: 3 percent of income)	MFEE	24,000	12,300	36,300
Owner’s personal retirement contribution	ELIMINATE	18,000	(18,000)	0
Total Operating Expenses		362,000	(65,700)	296,300
Net Operating Income		848,000	65,700	913,700
Capital Expenditures: roof replacement (moved from Repairs)	CAPEX	0	40,000	40,000

Source: office property.

Four things to notice, and two more

The three utilities lines are each coded UTL. On the lender’s form they add up into one utilities row, 64,000.
The delinquent taxes leave, because taxes are taken for the year without the prior year’s arrears.
The Management Fee is adjusted to the industry rate because a low fee understates cost.
The personal contribution is eliminated, in the same way as entity-level expenses.
The roof moves from Repairs to Capital Expenditures, which sit below Net Operating Income.
Net Operating Income rises by $65,700 or about 7.7 percent ($65,700 ÷ $848,000).

Check your understanding

1. A statement covers five months. What do you do with the income figure?

a. A partial-year operating statement needs to be annualized to 12 months, per Lender requirements.

2. The owner’s personal retirement contribution is on the operating statement.

b. Personal and entity-level expenses are eliminated, with a comment.

3. Nine months of income total $450,000. What do you report?

b. $450,000 × 12 ÷ 9 = $600,000.

Module summary

Normalizing puts every analysis in the same format so a lender can compare; it does not change what happened.
Taxes and Insurance at actual for the year; Management Fee to the industry rate; entity-level and personal items eliminated; one-time items moved; partial-year statements annualized.
Every adjustment is noted with a comment.
Adjustments can increase or decrease Income or Expenses.

Key terms. normalized · adjustment · Management Fee industry rate · annualize · one-time item · Effective Gross Income

Module 6

Judgment: when a line is unclear

Learning outcomes

After this module you will be able to:

work through a line that is unclear, step by step;
know when to ask the borrower or property manager;
comment why it was changed.

6.1A routine for a line that is unclear

Read the line and the lines around it. Which section is it in? Revenue or Expenses?
Check the coding matrix for this property type. The same label can code differently by property type.
Look at the prior year. Is it recurring, or new this year?
If it is still unclear, ask the borrower or property manager.
Comment on the change.
If you are still unclear, check with your Manager.

Exhibit 8. What to do with a line that is unclear

Source: the routine in this module.

A “Consulting” line of $30,000 is new this year. Which step do you reach?

Step 4: ask the borrower or property manager what the consulting was for. The prior year shows nothing like it, and the label alone does not decide the code. Then comment with your reasoning.

6.2Method for a non-recurring or an ambiguous repair

Compare with the prior year for recurring against non-recurring. If it is still ambiguous, ask the borrower or property manager before deciding. Then comment with your reasoning.

Check your understanding

1. A line is new this year and its label is not on the Matrix. What is the right next move?

b. Do not decide on a guess. Ask, then comment.

2. You are still unclear how to code a line even after speaking with the borrower. What do you do?

a. Unclear codes should be escalated to a conversation with your Manager

Module summary

Read the line and its section, check the Matrix, check the prior year, then ask. Always comment.
If you are still unsure, review with your Manager

Key terms. section · prior year · comment

Module 7

Comparing years: variance and comments

Learning outcomes

After this module you will be able to:

calculate the variance against the prior year;
say what the BREC standard asks for, and that a lender may ask for a different standard;
write a comment that gives the reason, not just the fact.

7.1What a variance is

The variance is the change from the prior year, in percent: (this year − prior year) ÷ prior year. The comparison is with the year immediately before, using normalized figures on both sides, so adjustments do not create false movement.

7.2What size of variance needs a comment

The industry standard asks for a written explanation when income, expenses, Capital Expenditures or the Debt Service Coverage Ratio change by more than 15 percent year over year. A lender or servicer can ask for a tighter threshold. The examples in this course use 15 percent on every line, so that more lines need a comment to practice on.

Common errors

When the prior-year figure is zero, a percentage cannot be calculated. Show the change in dollars and explain it in words, and check the lender’s instruction.

7.3Writing the comment

A comment gives the lender the reason, not just the fact. Where no comment is needed the field may say N/A. You write it from scratch: lenders ask for a reason for the change, there is no required wording.

In plain words

Fact: income increased 17.5 percent. Comment: a vacant floor was leased. The lender needs both.

Exhibit 9. Variance against the prior year

Measure	Prior year	Current	Change	Comment at 15 percent?
Effective Gross Income	1,030,000	1,210,000	+17.5%	Yes
Total Operating Expenses	280,000	296,300	+5.8%	No
Total Capital Expenditures	0	40,000	not a percentage	Explain the 40,000 in words

Source: the example in Module 5, with a prior year.

Income grew from $1,030,000 to $1,210,000. Is a comment needed at 15 percent?

Yes. The change is $180,000 ÷ $1,030,000 = 17.5 percent.

Write the comment for income that increased 17.5 percent after a vacant floor was leased and a one-time roof cost was moved to Capital Expenditures.

“Income increased because the third floor was leased during the year. Repairs are lower than reported because the roof replacement is a one-time cost, moved to Capital Expenditures.”

Check your understanding

1. Expenses rose from $280,000 to $296,300 and the threshold is 15 percent. Is a comment needed?

b. $296,300 ÷ $280,000 = 1.058.

2. A line moves from $18,000 to $29,000. Is a comment needed at 15 percent?

b. $11,000 ÷ $18,000 = 61.1 percent.

3. Which comment is better?

b. The lender needs the Fact and Reason.

Module summary

Variance is a change from the prior year, in percent, on normalized figures.
The BREC standard asks for an explanation above 15 percent on income, expenses, Capital Expenditures items and debt service coverage; a lender or servicer may use a tighter figure.
A comment gives the reason, not just the fact.

Key terms. variance · threshold · debt service coverage ratio · NA

Module 8

Rent roll review

Learning outcomes

After this module you will be able to:

say what a rent roll is and what it shows;
calculate the share of space with leases ending within 12 months, and occupancy;
say why the definition of each measure must be stated.

8.1What a rent roll is

A rent roll lists a property’s leasable spaces with tenants, lease dates and rent. It tells you how much of the property is leased and how soon leases end.

8.2Screening thresholds

This course uses two example thresholds. Real thresholds come from the lender’s agreement or the servicer’s own practice.

Occupancy:
Warn when occupancy is below 75 percent.
Rollover:
Look ahead 12 months from the rent roll’s own date.
Warn when 25 percent or more of the space has a lease that ends in that window.
Every tenant on a month-to-month lease counts as rollover risk.

Say which definition you used

Each measure can be calculated only on square footage, not on rent amount. floor area for the 25 percent; occupancy on the rent roll’s date for the 75 percent; month-to-month tenants inside the 25 percent or as their own warning. This course uses floor area, occupancy on the rent roll’s date, and month-to-month is included in the 12-month rollover.

8.3An example

A rent roll shows 30 spaces and 60,000 square feet. Spaces with a lease ending within 12 months of the rent roll’s date: 7 spaces, 16,500 square feet. Month-to-month: 3 spaces, 4,500 square feet. Occupied space: 51,000 square feet.

Exhibit 10. Rent roll checks

Check	Result	Warning?
Leases ending within 12 months	16,500 ÷ 60,000 = 27.5%	Yes (25% or more)
Month-to-month, in addition to the above	(16,500 + 4,500) ÷ 60,000 = 35%	Yes
Occupancy on the rent roll’s date	51,000 ÷ 60,000 = 85%	No
Occupancy once the expiring and month-to-month spaces vacate	30,000 ÷ 60,000 = 50%	Yes

Source: invented rent roll.

A rent roll shows 40,000 sq ft, 34,000 occupied, 8,000 sq ft with leases ending within 12 months and 3,000 sq ft month-to-month. What warning is applicable?

Leases ending: 8,000 ÷ 40,000 = 20%, no warning. If month-to-month is in addition to expiring leases: 11,000 ÷ 40,000 = 27.5%, a warning. Occupancy on the rent roll’s date: 34,000 ÷ 40,000 = 85%, no warning. Once the expiring and month-to-month spaces vacate: 23,000 ÷ 40,000 = 57.5%, a warning.

Check your understanding

1. A rent roll shows 60,000 sq ft, 51,000 occupied, 9,000 vacant and leases on 16,500 sq ft ending within 12 months. Which warning is applicable?

b. Rollover is 16,500 ÷ 60,000 = 27.5 percent, above 25. Occupancy on the rent roll’s date is 85 percent, which is above 75.

Module summary

A rent roll lists spaces, tenants, lease dates and rent.
Two screening thresholds: 25 percent or more of space expiring within 12 months; occupancy below 75 percent.

Key terms. rent roll · rollover · occupancy · month-to-month

Module 9

Completing and delivering the analysis

Learning outcomes

After this module you will be able to:

complete the worksheet with its three columns;
put the data onto the lender’s form, whatever form it takes;
write analyst’s notes, deliver the files, and keep a record;
handle an operating statement not required for lender submission and/or requests that need no analysis.

9.1The worksheet

The worksheet has three columns: borrower actual, adjustment and normalized. It comes from your coding, and each change keeps its reason. Nothing should be typed a second time. Net Operating Income is reflected with the adjustments.

Common errors

If a figure looks wrong on the worksheet, the cause is upstream, in a code. Fix the code upstream, not on the worksheet. Adjustments are made on the worksheet.

9.2The lender’s form

The worksheet is written onto the lender’s own form. Lenders take the analysis in different forms: an Excel template, a PDF, or figures keyed into the lender’s own website. For the last, there is no file; the submission is completed by hand, after the system completes the analysis.

Each lender’s form has its own layout, so for each form there is a table that says which cell each code is written into. That table is the form crosswalk. Every line has its own code, and the lines that share a code add up into the one cell that code points to. Three utilities lines coded UTL, for example, are added together and written into the utilities cell. When a lender sends a new version of its form, the crosswalk has to be checked against it.

Each lender requires the borrower’s statement with the coding written beside it (an annotated statement).

Three utilities lines each carry the code UTL. How do they reach the lender’s form?

The form crosswalk says which cell the utilities code is written into. The three lines are added together and the total goes into that cell. The three lines themselves stay as they are on the statement.

9.3Your notes

Leave a short record of the review: where the exceptions were, how they were handled, and what you learned. The next analyst, or you next year, will be reading it.

9.4Delivering and Recording

Submit the files to the lender by the lender’s route (its portal, email, or keyed into the lender’s system), then record who, when, by which route, and an optional note. The record is repeatable, because a lender can request revisions and a re-submission.

Common errors

The record is your word, not proof that the lender received anything. Record it only after you have actually submitted the files.

The form is complete. Has the lender received it?

Not yet. Complete means the form is filled in. Delivering it and recording that you did are the next two steps.

9.5Situations that do not fit the pattern

A second statement for the same loan and year. Do not let it silently replace the first. Keep both, compare them, and have a person decide.
A request that needs no analysis. Some requests, such as a quarterly rent roll or quarterly financial the lender requests, are received, forwarded and recorded without a lender form.

Check your understanding

1. The worksheet total looks wrong. Where do you fix it?

b. If a code error, the cause is upstream. Fix it there so the reason stays with the change.

2. The form is complete. What remains?

b. Complete is not delivered. Submit the files, then record it.

3. A second statement arrives for the same loan and year. What do you do?

b. It is never silently replaced. Both are kept and a person decides.

Module summary

The worksheet has borrower actual, adjustment and normalized; fix coding errors upstream.
Adjustments are made on the worksheet.
Lenders take the analysis in different forms; some need figures keyed in by hand. The form crosswalk says which cell each code is written into.
Deliver by the lender’s route, then record who, when and how.
A second statement is kept alongside the first, never swapped in silently.

Key terms. worksheet · lender form · form crosswalk · annotated statement · delivery record

Module 10

Practice Case

Learning outcomes

After this module you will be able to:

do a whole review on paper: code, adjust, and compare;
check your answer against the solution, and find where any difference came from.

An invented retail property. Work out the code, the adjustments and the normalized figures for each line, then the variance. Use the rules in Module 5. The Management Fee floor in this example is 3 percent of Effective Gross Income.

Exhibit 11. The practice case: the borrower’s lines

Line as the borrower reported it	Borrower actual
Base Rent	640,000
Vacancy and credit loss	(48,000)
Common-area charges billed to tenants (revenue section)	52,000
Late fees and forfeited deposits	9,000
Real estate taxes (includes 14,000 of the prior year’s arrears)	88,000
Insurance (actual)	21,000
Electric	18,000
Water	9,000
Repairs and Maintenance (includes 12,000 for one-time parking-lot resurfacing)	41,000
Management Fee	13,000
Owner draw	7,200

Source: invented retail property.

Prior year (already normalized), for the variance: effective gross income 610,000; real estate taxes 70,000; insurance 20,000; utilities 25,000; Repairs and Maintenance 18,000; Management Fee 18,300.

Code each line.
Decide each adjustment and write a reason for it.
Complete the three columns, with effective gross income, total operating expenses and net operating income.
Work out the variance for each measure at 15 percent. Write a comment for any that needs one.

Show the solution

Exhibit 12. The practice case, coded and normalized

Line	Code	Borrower actual	Adjustment	Normalized
Base rent	BR	640,000	0	640,000
Vacancy and credit loss	VAC	(48,000)	0	(48,000)
Common-area charges (revenue)	ER	52,000	0	52,000
Late fees and forfeited deposits	OI	9,000	0	9,000
Effective gross income		653,000	0	653,000
Real estate taxes	RET	88,000	(14,000)	74,000
Insurance	PINS	21,000	0	21,000
Electric	UTL	18,000	0	18,000
Water	UTL	9,000	0	9,000
Repairs and maintenance	R&M	41,000	(12,000)	29,000
Management fee (floor 3 percent of 653,000 = 19,590)	MFEE	13,000	6,590	19,590
Owner draw	ELIMINATE	7,200	(7,200)	0
Total operating expenses		197,200	(26,610)	170,590
Net operating income		455,800	26,610	482,410
Capital Expenditures: parking-lot resurfacing	CAPEX	0	12,000	12,000

Source: solution to the practice case.

Electric and water are each coded UTL; on the lender’s form they add up to 27,000. Adjustments raise net operating income by 26,610 or about 5.8 percent.

Exhibit 13. Variance against the prior year, at 15 percent

Measure (normalized)	Prior year	This year	Change	Comment?
Effective gross income	610,000	653,000	+7.0%	No
Real estate taxes	70,000	74,000	+5.7%	No
Insurance	20,000	21,000	+5.0%	No
Utilities	25,000	27,000	+8.0%	No
Repairs and Maintenance	18,000	29,000	+61.1%	Yes
Management Fee	18,300	19,590	+7.0%	No

Source: solution to the practice case.

A model comment for Repairs and Maintenance: “Repairs rose because routine patching and lighting repairs increased across the parking area during the year. The one-time resurfacing of 12,000 is excluded and shown under Capital Expenditures.” (Your comments will differ. A good comment gives a reason and says what was excluded.)

If your answer differs: first check the section subtotals, then which adjustment rule applies, then the arithmetic.

Module summary

Code, then adjust, then compare.
Each adjustment has a reason; each variance over the threshold has a comment.

Appendix A

Exercises and flashcards

Exercises

Answer on paper before you open each solution.

1. A statement covers three months only. Can you annualize it?

Yes, multiply it by 4. A partial-year operating statement is annualized to 12 months, per Lender requirements

2. A statement shows “Common-area charges” in revenue and again in expenses. One code?

No. Billed to tenants in revenue, it is a reimbursement. In expenses it is a cost of repairs and upkeep. Check the Matrix column for the property type.

3. Real estate taxes are 150,000, including 20,000 of the prior year’s delinquency. What is the adjusted figure?

130,000. Taxes are taken without the prior year’s arrears; the adjustment is (20,000).

4. Nine months of income total 450,000. What do you report?

(450,000 ÷ 9) *12 = 600,000

5. A line is ambiguous: a large “Roof repair”. What is the method?

Compare with the prior year for recurring against one-time. If still ambiguous, ask the borrower or property manager before judging. Record the answer with the reason.

6. The Management Fee is $24,000 on Effective Gross Income of $1,210,000; the industry rate in the example is 3 percent. Do you adjust the fee?

Yes, 3 percent of 1,210,000 EGI is 36,300. Therefore an adjustment of +12,300 is needed.

7. Income grew from $1,030,000 to $1,210,000. Comment needed at 15 percent?

Yes. The change is 17.5 percent.

8. A rent roll shows 60,000 sq ft, 51,000 occupied, and leases on 16,500 sq ft ending within 12 months. Is there an applicable warning?

The 25 percent rollover warning applies: current scheduled rollover is 27.5 percent. The 75 percent occupancy warning does not apply: currently 85 percent as of the rent roll’s date.

9. True or false: once the form is complete, the lender has it.

False. Complete means the form is filled in. You submit it by the lender’s route and record who, when and how.

10. True or false: a variance comment can state the percentage change.

False. The percentage is already in the table. The comment gives the reason.

Say it in your own words

Cover the answer, say the meaning aloud, then open it.

Coding

Using the CREFC Matrix, identify each line of the borrower’s statement and apply the corresponding code, giving each line its own code.

Normalizing

Adjusting coded values to industry standard rules, with a comment for every change.

Form crosswalk

The table that says which cell on a lender’s form each code is written into. Lines with the same code add up into that one cell.

Variance

The change from the prior year, in percent. If over the threshold, it needs a written comment.

Eliminate

Remove an Income or Expense from the analysis, such as an entity-level or personal one.

Watch list

Loans the lender watches closely; quarterly documents required and submitted.

Effective gross income

Rent and other Operating Income after Vacancy and Credit Loss.

Net operating income

Effective Gross Income less Operating Expenses. Capital Expenditures are below the line.

Appendix C

Check your progress

Check what you can do without looking at the guide above.

I can explain Coding and Normalizing.
I can give a line its code, and say why section and property type matter.
I can change a code and write a reason that says what I learned.
I can make the five common adjustments.
I can work out a variance and write a comment that gives a reason.
I can annualize a partial-year statement.
I can check a rent roll against screening thresholds and state my definitions.
I can finish a review, submit it, and update the record.
I finished the practice case and my answer matched.

Teach it back. Pick a colleague and take them through the practice case without notes. Where you stumble is the part to read again.

Appendix D

Glossary

Adjustment: A change from what the borrower reported to what the industry standard requires, made with a reason.
Annotated statement: The borrower’s statement with the coding written beside it.
Annualize: Scale a partial-year statement up to a full year.
Borrower actual / Adjustment / Normalized: The worksheet’s three columns: what the borrower reported, the change, and the result.
Capital Expenditures: Replacements and reserves. They sit below net operating income.
Code: A short letter code from the CREFC Matrix that says what kind of income or expense a line is. Codes are letters, never numbers.
CREFC Coding Matrix: The standard’s table that maps each operating statement line name to a code for each property type.
CREFC: The Commercial Real Estate Finance Council, whose reporting standard dictates the codes and rules used here.
Effective Gross Income: Rent and other operating income after vacancy and credit loss.
Eliminate: Remove an income or expense from the analysis, such as an entity-level or personal expense.
Form crosswalk: The table that says which cell on a lender’s form each code is written into. Lines that share a code add up into that one cell.
Lender form: The lender’s own form, as received. The completed form is the analysis.
Loan Portfolio: The servicer’s record of its loans, lenders and property types.
Lookup: Finding a statement line’s label in the coding matrix, for its sheet and property type, and reading the result. The label must be the same after capital letters and spacing are ignored; nothing looser counts.
Management Fee - Industry Rate: The minimum Management Fee used in Normalizing: 3 to 5 percent of EGI, never below the fee at underwriting.
Net operating income: Effective gross income less operating expenses.
Normalizing: Adjusting coded figures to the industry standard’s rules, with a reason for every change, so properties and years can be compared.
Operating statement: The borrower’s own account of the property’s income and expenses.
Prior year: Values from the preceding year, used for the variance.
Property type: Office, retail, multifamily, industrial, self storage and so on. It decides which codes apply.
Rent roll: A property’s list of leasable spaces with tenants, lease dates and rent.
Review: One loan and one year of work.
Coding: Using the CREFC Matrix, identify each line of the borrower’s statement and apply the corresponding code, giving each line its own code.
Subtotal: A total listed on the statement. It is shown and never coded.
Variance: The change from the prior year, in percent. Over the threshold, it needs a written reason.
Watch list: Loans the lender watches closely; quarterly documents required and submitted.

Appendix E

Further study

Providers who publish industry materials. Check each provider’s own page for current content and price.

Provider	Title	What it offers
Commercial Real Estate Finance Council (CREFC)	Investor Reporting Package: methodology for analyzing and reporting property income statements	The source of the standard used in this course: scope and annualization, the normalization rules, the coding matrix, and the blank forms. Reference text, not a course. Free to download from crefc.org.
Mortgage Bankers Association (MBA)	Monitoring Commercial/Multifamily Property Operations	Short self-study course on property surveillance, financial statements, rent rolls and watch lists. Paid.
Mortgage Bankers Association (MBA)	Commercial/Multifamily Performance Surveillance	Self-study course on financial statement analysis, defaults and compliance tests. Paid.
Mortgage Bankers Association (MBA)	CREF Academy: Borrower Credit and Financial Analysis	Instructor-led online course on borrower structures and financial statement analysis. Paid.
Commercial Real Estate Finance Council (CREFC)	Education catalog: Underwriting 201, CRE 100 and the Servicing series	Live and recorded courses, with a case study in Underwriting 201. Paid.

Free reference documents

These are free to read and need no sign-in. They are published by the lenders and agencies, who set the rules that apply to a loan. Where a lender’s own form or instruction differs from anything here or in this course, the lender’s form wins.

Publisher	Title	How to use it
Fannie Mae	Multifamily Analysis of Operations Form 4254 and 4254 Seniors: line item definitions (August 2024, 15 pages) https://multifamily.fanniemae.com/media/document/pdf/form-4254	Defines every income and expense line, with what to include and what to leave out. Its rules agree with this course: annualize only with six months or more of data; management fee between 3 and 5 percent of income, never below the underwritten fee; ad valorem and personal property taxes in general and administrative; reserve deposits as capital items. Read it beside Module 4 and Module 5.
Fannie Mae	DUS Operating Statement Standard (spreadsheet) https://multifamily.fanniemae.com/media/document/xlsx/multifamily-dus-operating-statement-standard	A standard list of operating statement lines with a business glossary. The nearest public thing to a chart of accounts. Use it to check the lines you code in Module 3.
Fannie Mae	DUS Rent Roll Standard (spreadsheet) https://multifamily.fanniemae.com/media/document/xlsx/multifamily-dus-rent-roll-standard	About fifty fields that describe a rent roll, with a sample rent roll. Use it with Module 8 to see what a complete rent roll contains.
Freddie Mac	Best Practices for Securitized Deals (30 pages) https://mf.freddiemac.com/docs/best_practices_securitized_deals.pdf	What a servicer reports each quarter and year, when it is due, and what makes a good variance comment: the cause of the change, not the arithmetic. Read it beside Module 7 and Module 9.
Freddie Mac	Surveillance (workshop slides, 2018, 35 pages) https://mf.freddiemac.com/docs/surveillance.pdf	How a watch list works and a short template for watch list commentary. Dated, so use it for the shape of the commentary, not for current rules.
Adventures in CRE	The Road to a Stabilized NOI (three free articles: loss to lease, vacancy and credit loss, capital reserves) adventuresincre.com/stabilized-noi-loss-to-lease-multifamily/ adventuresincre.com/the-road-to-a-stabilized-noi-vacancy-and-credit-loss-in-real-estate-underwriting/ adventuresincre.com/the-road-to-a-stabilized-noi-capital-reserves-case-study/	Plain-English background on how an underwriter builds a forward-looking income figure, mostly for apartments. It is about projecting income, not spreading a statement, so read it for background only.

Version 1.3, 12 November 2026. Draft for review. All figures in the examples are invented. The CRE Finance Council standard is paraphrased, not reproduced.

Start here

▸How the course works

▸Course map

▸Suggested study plan

The work and its vocabulary

1.1The work in context

1.2Coding and normalizing

1.3One analysis, start to finish

1.4How the information changes form

1.5The reporting standard

1.6The year

Intake: what arrives and what to confirm

2.1What arrives

2.2What is confirmed before you start

2.3Who handles missing data

2.4The lender’s form

Reading and coding an operating statement

3.1The shape of an operating statement

3.2One line, one code

3.3Changing a code, and saying why

3.4Splitting and adding lines

What the CREFC matrix’s codes mean

4.1How the matrix works

4.2Looking a line up in the matrix

4.3Income Categories

4.4Expense Categories

4.5What is eliminated and what is flagged

4.6Where property type changes the answer

4.7Traps

Normalizing: the adjustments

5.1Why normalize?

5.2The CREFC Matrix adjustments

Taxes and Insurance

Management Fee

Entity-level and personal expenses

One-time Items (Non-Recurring Income or Expenses)

A Partial-Year Statement

5.3An Example

Judgment: when a line is unclear

6.1A routine for a line that is unclear

6.2Method for a non-recurring or an ambiguous repair

Comparing years: variance and comments

7.1What a variance is

7.2What size of variance needs a comment

7.3Writing the comment

Rent roll review

8.1What a rent roll is

8.2Screening thresholds

8.3An example

Completing and delivering the analysis

9.1The worksheet

9.2The lender’s form

9.3Your notes

9.4Delivering and Recording

9.5Situations that do not fit the pattern

Practice Case

Exercises and flashcards

Exercises

Say it in your own words

Checklists and reference sheet

Before you start a review

Before you call it complete

After the form is complete

The one-page reference

Check your progress

Glossary

Further study

Free reference documents