Introduction to Real Estate Finance and Investment (April 2018)

Developed for non-finance professionals, this new ULI online program will provide a broad and solid introduction to the basics of real estate finance and investment. Held over four sessions, the course will begin with a general overview of real estate property types and capital sources. From there the program will progress discussing basic analytical tools and performance measures. The workshop will acquaint students with fundamental real estate finance terms and concepts including: time value of money, capital stack, risk-return tradeoff, and financial leverage. Using examples and Excel spreadsheet, it will demonstrate important calculations in real estate finance and investment, such as internal rate of return (IRR), mortgage payment and loan balance, and property valuation. This course is recommended for non-finance real estate professionals who wish to gain a basic understanding of real estate finance that also will help them get more out of their professional interactions.


Program Highlights

Session 1.


Overview of real estate markets

Capital sources: debt vs. equity

Key financial concepts

                  Time value of money (TVM)

                  Risk and return

Basic TVM calculations

                  Compounding and Discounting

                  Compounding Frequency


Session 2.

Financial Leverage: Implications and Examples

Commercial and Residential Mortgages

                  Similarities and differences

                  Main underwriting criteria

Mortgage Calculation

                  Monthly payment

                  Annual Percentage Rate (APR)

Mezzanine Debt vs. Second Mortgage


Module 3.

Basics of Real Estate Investment

Performance Measures

                  Internal Rate of Return (IRR)

Cash on Cash

                  Equity Multiple

Real Estate Valuation

                  Direct Capitalization Approach

                  Discounted Cash Flow (DCF) Approach

How Net Operating Income (NOI) is Derived

The Real Estate Pro Forma Defined


Module 4.

Basics of Real Estate Development Finance

Construction Financing vs. Permanent Financing

Financial Analysis of a Development Project

                  Internal Rate of Return (IRR)

                  Equity Multiple

                  Residual Land Value

Investment Return Waterfalls

Course wrap up


Burnham-Moores Center for Real Estate
University of San Diego
San Diego, California

Tu is the Daniel F. Mulvihill Professor of Commercial Real Estate at the Burnham-Moores Center for Real Estate at the University of San Diego (USD). Tu joined the USD faculty in 2004 and was appointed the academic director of the Master of Science in Real Estate (MSRE) program in 2010. He is also responsible for the curriculum of the undergraduate real estate major.

Tu's research covers a wide range of topics, including housing valuation, smart growth and the new urbanism, sustainable and green buildings, commercial mortgage-backed securities (CMBS), real estate investment trusts (REITs), multifamily housing, retail shopping centers, and real estate education. He has published in many academic journals and for professional organizations such as the Urban Land Institute (ULI) and the Mortgage Bankers Association (MBA). Tu was a primary investigator of research projects sponsored by government agencies, including the U.S. Department of Energy, the U.S. Environmental Protection Agency, the California Energy Commission, and the District of Columbia Government. He currently serves on the editorial board of the Journal of Sustainable Real Estate.

Tu earned his PhD in business administration from the George Washington University (GWU) in 1999. He received the Chartered Financial Analyst (CFA) designation in 2000 and became a LEED Accredited Professional in 2009. He is ARGUS Software Certified (ASC) for ARGUS Valuation-DCF, ARGUS Enterprise and ARGUS Developer. Before joining USD, Tu taught real estate and finance courses at GWU and California State University and Fullerton.

Program Information
Program Date:
April 26, 2018
Introduction to Real Estate Finance and Investment Session 1
Introduction to Real Estate Finance and Investment Session 2
Introduction to Real Estate Finance and Investment Session 3
Introduction to Real Estate Finance and Investment Session 4
Individual topic purchase: Selected
Urban Land Institute
Attendance: 8.00
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