Basic Real Estate Finance

Basic Real Estate Finance

Basic Real Estate Finance

Basic Real Estate Finance is designed to provide entry level professionals with the skills necessary to analyze the financial feasibility of real estate investment opportunities. It provides a step-by-step approach for completing a financial feasibility analysis. Students will become more familiar with real estate market participants, valuation fundamentals, determinants of real estate returns, the impact of leverage on real estate investments, and interactions between the real estate space market and the capital market. This course is ideal for developers, asset managers and owners who have very little financial analysis experience. It will therefore emphasize fundamentals and will not delve into more complex issues that are covered in NAIOP's Advanced Real Estate Finance course.

This course is also available on-demand.

Lesson Plans

Module 1

Introduction to Space Markets and Capital Markets

Time: noon - 2 p.m. (Eastern Standard Time)

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Date: May 3, 2018

This session focuses on the relationship between the space market and the capital market, which will be used as a framework for the entire course. We'll also discuss why real estate is a unique asset class and identify major property types and classifications along with key real estate investors. In addition, this session will introduce the four quadrants of the capital market, discuss investment strategies and examine historic real estate returns.

Module 2

Real Estate Valuation Using Direct Capitalization

Time: noon - 2 p.m. (Eastern Standard Time)

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Date: May 10, 2018

This section will focus on the basic structure of a real estate operating statement and how capitalization rates are used in conjunction with the operating statement to derive an estimate of value.

Module 3

Real Estate Valuation Using Discounted Cash Flow Analysis

Time: noon - 2 p.m. (Eastern Standard Time)

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Date: May 17, 2018

In this section, we will differentiate discounted cash flow analysis from direct capitalization when the technique is presented to provide students with a clear understanding of the relationship between the two approaches to valuation.

Module 4

Real Estate Leases

Time: noon - 2 p.m. (Eastern Standard Time)

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Date: May 24, 2018

This section will cover the legal aspects of real estate leases and focus on how each type of lease structure influences cash flow/value.

Module 5

Determinants of Real Estate Returns

Time: noon - 2 p.m. (Eastern Standard Time)

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Date: May 31, 2018

Capitalization rates and discount rates will be broken down into their component parts to help students estimate potential changes in the rates over time.

Module 6

Introduction to Debt Financing

Time: noon - 2 p.m. (Eastern Standard Time)

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Date: June 14, 2018

This session will emphasize mortgage terminology and basic skills such as calculating mortgage payments and balances in this module. We'll also discuss the relationship between leverage and investment risk.

Module 7

Leveraged Real Estate Investments

Time: noon - 2 p.m. (Eastern Standard Time)

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Date: June 21, 2018

Leverage is incorporated into the reconstructed operating statement in this section to analyze the financial performance of a real estate investment.

Facilitator for this Lesson:
Paul R. Knapp, Sr.

Paul R. Knapp, Sr.

Managing Director / Vice President

St. Paul Properties / Vomela Specialty Company

Subject Area:

Paul Knapp is Managing Director of St. Paul Properties and Vice President of Vomela Specialty Company. His duties include real estate investment, financing, and management, as well as acquisitions, legal, and family business office organization and management.

Knapp previously served as Director of Operations for a 100-year-old Minnesota family business office which he transitioned into a new management team and business focus. He acquired, managed, redeveloped and disposed of office and industrial real estate projects located around the country. He also managed a venture capital fund for the family office, investing in emerging high-tech and med-tech companies.

Paul regularly teaches on the subjects of real estate investment, and private company and family business governance. He is an adjunct professor at The University of Minnesota Law School. Paul Knapp graduated from The College of Saint Thomas with a Bachelor of Arts degree in Finance and William Mitchell College of Law with a Juris Doctor degree.

Module 8

Analyzing Debt Financing Options

Time: noon - 2 p.m. (Eastern Standard Time)

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Date: June 28, 2018

We'll discuss the skills necessary to estimate the maximum loan amount a property will support and to choose between financing options with different terms.

Education Credits

Education Credits

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Basic Real Estate Finance is approved for the following Education Credit:
16 hours credit toward either the Certificate of Advanced Study in Commercial Real Estate Development or the Certificate of Advanced Study in Real Estate Finance.

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16 AIA/CES Learning Units
16 Professional Development Hours (PDH)
1.6 Continuing Education Units (CEUs)

Learning Objectives

Learning Objectives

  • Defining "space markets" and "capital markets"
  • Identifying the four quadrants of the capital market
  • Developing an operating statement
  • Understanding capitalization rates
  • Differentiating capitalization rates from total yield
  • Defining and calculating net present value (NPV)
  • Defining and calculating unlevered internal rate of return (RR)
  • Differentiating between gross leases and net leases
  • Incorporating tenant reimbursements into the operating statement
  • Identifying the factors that cause capitalization rates and discount rates to change over time
  • Identifying sources of discount rate and capitalization rate data
  • Examining the relationship between leverage and risk
  • Calculating loan payments and loan balance

Tuition & Register

Tuition & Register

Payment for a NAIOP online course entitles access for one person only to the course and all materials.

Course Tuition

  • Member: $795
  • Nonmember: $995
  • Developing Leader: $595
  • Student Member: $95
  • Student Nonmember: $145

FAQs

FAQs

What does tuition cover?

Payment for a NAIOP online course entitles access for one person only to the course and all materials.

Is there an online instructor?

Yes, there is a live instructor presenting each class. Students are able and encouraged to engage and interact with the instructor and each other.

How much out-of-class work is required for each course?

Courses offered online require no more than one hour per week of additional work outside of the scheduled class times.

What if I miss a scheduled class?

If a student misses a class, all materials and a recording of each class is posted in the material library for the student to review before the next class. A student must attend a minimum of 75 percent of the classes to receive credit.

Do I have to take an exam?

Course exams are not required unless you are enrolled as a candidate for the Certificate of Advanced Study in Commercial Real Estate or the Certificate of Advanced Study in Real Estate Finance.

What records are kept of my coursework?

The Center maintains records of all the coursework you complete, as well as optional exam scores, in a confidential transcript. Transcripts are available to candidates upon request. Please contact education@naiop.org.

What are the computer requirements?

The interactive sessions will be accessed via GoToWebinar.com.

Please use the list below to determine if your computer meets the minimum requirements recommended to participate in the online courses:

To attend on a PC, the following is required:

  • Internet Explorer® 6.0 or newer, Mozilla® Firefox® 2.0 or newer (JavaScript™ and Java™ enabled)
  • Windows® 2000, XP, 2003 Server or Vista
  • Cable modem, DSL or better Internet connection
  • Minimum of Pentium® class 1GHz CPU with 512 MB of RAM (Recommended) (2 GB of RAM for Windows® Vista)

To attend on a Mac®, the following is required:

  • Mac OS X 10.4 (Tiger®) or newer
  • Safari 3.0 or newer, Firefox 2.0 or newer (JavaScript™ and Java™ enabled)
  • Cable modem, DSL or better Internet connection
  • Power PC G4/G5 or Intel processor (521 MB of RAM or better recommended)

Participants wishing to connect to audio using VoIP will need a fast Internet connection, a microphone and speakers (a USB headset is recommended).

Contact Barb Parnarouskis at barbp@naiop.org for more information.