PLE 635 Lecture Notes - Lecture 1: Cash Flow
27 Jan 2017
School
Department
Course
Professor
Feasibility Analysis of Development - Week 1
17/01/2017
How to measure a good investments:
● Profit
● ROI
● Overall Return
Rule of Thumb:
High Return = High Risk
Low Return = Low Risk
Trends that affect developments
➔ Transportation/infrastructure developments
➔ Population growth
➔ Environmental concerns
➔ Technology
➔ Government regulations
➔ Terrorism
What we will learn:
● Objectively compare properties
● Look at cash flow, ROI and Return
● Outline financials
Types of Real Estate
➔ Residential - Condos tend to be less risky
➔ Office
➔ Retail - Very Volatile
➔ Industrial
➔ Land
Why Real Estate is Different
1. Non-standard pricing - illiquid
2. Highly leveraged* - debt/mortgage
3. Durable - long lifespan
4. Highly regulated
5. Fixed location
6. Highly Cyclical
*NB: Leveraged - Debt. Mortgages and Debt are the same
6 Stages of Development/Acquisition:
1. Feasibility and Acquisition - market analysis, site acquisition, regulatory approvals
2. Design
3. Financing
find more resources at oneclass.com
find more resources at oneclass.com
