How to Create an Offering Memorandum with CREBuilder.
In this guide, well go step by step to creating an offering memorandum.
Gather the Information You Need:
Once you’re ready to start building your first marketing package, make sure you have the following information on hand.
- Legal Property Address or Parcel ID according to your county’s tax records. If your property has more than one legal address or multiple Parcel IDs, make sure you have all of them to get the most accurate property data.
- High quality images of your property. If you have aerial maps, drone shots or custom retailer maps, gather all of those as well.
- List of property features and highlights. Not sure what to write? Use our pre-written examples we have provided, and modify them to best represent your property.
- For an Offering Memorandum you’ll also need:
- Rent Roll, Income, Expenses to create a cashflow projection, generate an NOI and CAP Rates.
- Tenant Highlight Roster (Optional)
- Sales Comparables (Optional)
- Dont have all of the information right now? You can always come back and edit your marketing docs, add text, details, images, change colors and more at anytime.
Getting Started. First Steps:
Choosing the Right Template:
Your first step in the CREBuilder process is to choose a property type and template:
Select your property’s type by clicking one of the icons
Next, choose what type of document you would like to create. In this case, choose Offering Memorandum
Choose a template design, and pick a theme color. You can always change templates, colors and see more customization options in the last step of the builder, the “Finalize Page”
Title & Property Address or Parcel ID:
Enter Your Property’s Name or Title. Then input the Legal Property Address or Parcel ID according to your county’s tax records. If your property has more than one legal address or multiple Parcel IDs, make sure you have all of them to get the most accurate property data.
If your address does not match your county’s records, you will be prompted to correct the address, or continue and add your property details manually.
If your property is comprised of multiple addresses or parcels, click the corresponding button below.
A 2nd address or parcel can be added. You can also add additional addresses if necessary.
Automated Property Data:
CREBuilder will automatically gather your property information. You can now verify, modify or add any data points you would like.
2 Tables of Data will appear. On the left will be property data for the current selected address (if your property has multiple addresses) and on the right will be the total property details. The right column is what will display on your marketing doc.
To Edit data, click the pencil icon next to each property detail. You must confirm and click the green check when editing any detail. Press the red X to remove the item. Use the Icon on the left to reorder the display if the property data.
To see more automated data available, click the blue button ‘VIEW MORE DATA”
To add your own custom property details, click the orange button “ADD CUSTOM DATA”
If a data point is blank or 0, it will not show on your doc.
Maps & Demographics are also automatically generated and added to your doc.
View & Edit Property Data. Add, delete, and rearrange.
If you are using multiple addresses, you can switch between them to see individual details per address by clicking the corresponding address in the sidebar. The main table will show the current selected address property data. The Table on the right will always show property detail totals.
This step is pretty self explainatory. Just input your selling price. You can always adjust this later.
Don’t want to use a selling price? Click the negotiable check box.
A sales price is required to calculate a CAP Rate and other rates when you generate a financial / cashflow projection.
If this is your first time using CREBuilder, at this step you will enter your contact information and company’s contact information. Create a password in order to continue and save your work.
If you have an account and are already signed in, all of this information will populate from your profile automatically.
Upload a Profile photo and Company Logo. You can adjust and zoom your logos and profile pic by placing our mouse over and clicking the edit option. Adjusting your image will change how it displays on the marketing document.
You can add a secondary contact by pressing the “ADD CONTACT” button.
Note: Live Doc Preview
After this step, you will start to see your document template come to life. As you go through each step, it will automatically fill and become more complete. Click the thumbnails on the bottom to open a larger preview. For tips on how to add and edit images in the live previews, see our Getting Started Guide and our Image Tutorials
Write an introductory statement or property description outlining the property, its main features, investment opportunities, and some brief highlights.
Get help writing your introductory statement with the pre-written examples we have provided. Just click “ADD” next to the pre-written statements in the left column, to be added to the right column which will display on the doc. You can edit any of the text. Make sure to replace all Blue text with your property’s details or features.
Click “ADD BLANK” to type your own introductory statement.
You will see this text instantly added to the document preview.
Investment & Location Highlights:
Using the same method as the investment summary, add some investment and property highlights, followed with highlights about the location.
Click “ADD BLANK” to type your own introductory statement.
Choose some highlights to showcase your property’s amenities and investment features and benefits. Use and edit the pre-written examples we have provided for some inspiration! Make sure to replace all Blue text with your property’s details or features.
Use the same steps as investment highlights to complete the location highlights.
Use this step to add property photos to your Offering Memorandum. We provided you with a guideline of image placement. Images placed here will automatically be positioned in your marketing doc, however, you can adjust and change the position of these images as you see fit. Click the thumbnail of a live preview doc on the bottom to see a larger preview, and be able to edit and adjust your images.
For a complete detailed guide on adding and editing images, CLICK HERE
Financials, Rent Roll, Expenses & Assumptions:
Enter your property’s rent roll to start generating income for your financials & cash flow projections. Your completed rent roll will display on the preview of your doc. Click the thumbnail of the rent roll to open a larger preview.
Adding Tenants / Leased Spaces:
To add the first tenant to your rent roll, click ADD TENANT. Here you will input the following information:
- Space or Suite #
- Tenant Name
- Square Footage of Space
- Lease Type: NNN, MG, FSG, ETC.
- Lease Start & End Dates
- Base Rent: can be input by SF, annual, or monthly amounts.
- Other Income: This can be your passthrough or additional charges to the tenant. NNN, CAM, Taxes, Insurance, Etc. Use the dropdown to select the appropriate type.
To add a vacancy to your rent roll, click ADD Vacancy. Here you will input the following information:
- Space or Suite #
- Square Footage of Space
- Projected Base Rent: can be input by SF, annual, or monthly amounts.
Additional income is all property income that is not from the rent roll, tenants paying rent, or passthrough expenses included on the rent roll.
For this step, you only need to add the income source (name) as well as the annual amount. Don’t have any additional income? You can skip this step by not adding anything and clicking next.
Some examples of additional income sources.
- Event-Based Fees
- Billboards or Cell Towers
- Laundry (for Multifamily)
- Services for Tenants
Expenses are added the same way as additional income
For this step, you only need to add the expense source (name) as well as the annual amount. Don’t have any additional income? You can skip this step by not adding anything.
You will see 3 default items, Property Insurance, Property Tax and Management Fee, since these items are most common expenses for all property types. Click the Edit button on the right of each item to modify the amount.
Click add expenses to add additional expenses specific to your property.
Some examples of expenses.
- CAM Fees (Common Area Maintenance) – not including capital improvements
- Administrative and Legal Fees
- Contracted Services (security, landscaping, janitorial)
- Supply Costs
- Seasonal / Holiday displays
Assumptions, Growth Rates, Potential First Loan
Assumptions and Projections is what makes your cashflow projection come to life. Choose your analysis period, add growth rates, and even include a potential loan.
Overview of Assumptions Page
- Analysis Period: Choose how many years to extend your cash flow projections. From 1 Year (current) to 10 years is available for cashflow projections.
- Analysis Start Date: The date you want to start your projections from
- Expenses Source: The source of the expenses you input. (ex. Actual, Budget 2022, Management Report)
- Market Rent/SF: Input market rent / SF, or click the checkbox to use the average income from your rent roll. This will affect your lease up rates and vacancy losses for future projection years.
- Exit Cap Rate & Exit Year: Pick an exit CAP Rate & Exit year to generate Exit Pricing assumptions. Check the box below if you do not want to include exit pricing.
Annual Growth Rates - Basic:
Annual growth rates will affect your cash flow projections, the first increase of rates will occur in year 2. You can choose to use a percentage (%) increase, or a flat dollar amount ($) as your annual increase by choosing the appropriate selection after the growth rate input.
- Income: This rate will affect your base rental and any “other income” (your passthrough or additional charges to the tenant) input in the rent roll
- Additional Income: This rate will affect all income input in the “additional income” step, non-rental income.
- Turnover / Lease Up: What amount of your vacancies will be leased up throughout the year. This is best if the rate is a %.
- CAM / Expenses: This rate affects all expenses except for the default expenses provided: Property Insurance, Property Tax, & Management Fees
- Property Insurance: Growth rate for property insurance (default in expenses)
- Property Tax: Growth rate for property tax (default in expenses)
- Management Fee: Growth rate for Management Fee (default in expenses)
Annual Growth Rates - Advanced & Variable Rates:
Use the Advanced / Variable rates to create a cashflow that does not increase in a straight line year after year. Click the orange button to open up the advanced / variable rate input.
Input your % increases or flat dollar amounts year by year. You can also use a negative value to show a loss.
Potential First Loan:
Put a potential first loan in place so investors can see a cash-on-cash return, or if you are offering seller financing on the property.
Toggle the switch to include a potential first loan and fill out the fields.
Inputting this information will generate a cash-on-cash return.
Cash Flow Projections:
Your Completed Cashflow Projections will display on your doc once you input all of the assumption. You can always go back to previous steps and adjust your inputs to modify the projections.
Highlights the property’s tenants. Upload a logo and a brief description of the tenant.
If you do not want to add a tenant roster, go to the next step without inputting any information.
Add sales comparables. You can add any property, sold or still active. Fill in the details in the form, upload a photo, and add a brief description.
Don’t want to add any sales comparables? Just leave this page blank and click next.
CREBuilder will automatically generate city information including a brief summary, area facts, and 2 images (city image and city map.) Feel free to add, edit, or remove any of this information as you feel fit.
Note: Not all cities have the same available information or amount of images. You can upload your own image if there is not one, or replace the current image. The images can be adjusted and moved on the live document preview the same method as all other images. These images can only be swapped or changed through this menu.
Finalize Your Offering Memorandum:
The last step of the Offering Memorandum builder will allow you to customize your document’s theme, fonts, color and more.
Use the menu on the left to jump to any section of the document to edit any details.
You can flip through the pages withe the navigational arrows, or use the thumbnails on the bottom to select a page to preview. You can edit any images and maps from this screen as well.
When you are ready to complete your doc, click the “Finalize Doc” button. You will be taken back to your dashboard where you can download your completed offering memorandum.
Don’t worry, you can always come back and change any details of your offering memorandum if you are not completely satisfied, or want to make any edits.
Downloading Your Finished Offering Memorandum:
You can access the download option for your marketing doc from the dashboard.
Just use the dropdown menu associated with the doc you want, and click download.
More How To Guides:
Want to see more How to Guides? Click Here