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Certified Real Estate Financial Modeller

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4.8
English
Advanced
7 Nasba
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Course Overview

The recent turmoil in world financial markets, which has been closely tied to events in the real estate market, suggests that investors, lenders, and others who participate in the real estate market need to better understand how to evaluate the risk and return associated with the various ways of investing and financing commercial and residential real estate.The course is designed not only to help delegates understand the characteristics of the various vehicles for lending and investing in real estate, recognize the valuation techniques practically utilized in the valuation of properties, comprehend the full picture of risk-return analysis in the real estate market, but also to model these concepts in best-practice Excel models. This is the only way to make sure that delegates can apply these concepts professionally and to avoid costly mistakes.
Concepts and techniques included in this 5-days intensive program course are used in many careers related to real estate. These include investing, development financing, appraising, consulting, managing real estate portfolios, leasing, managing property, and managing corporate real estate. This material is also relevant to individuals who want to better understand real estate for their own personal investment and financing decisions.
Every participant in the event will receive a copy of a leading textbook in the real estate investment. The course will lead participants form the basics of the real estate industry all the way to the very advanced topics. The presenter, Hamed Behairy, has international reputation in conducting very practical and in-depth training programs. Above all, most of the knowledge will be delivered through actual Excel models that top professionals in this market utilize.

Key Takeaways

1
Learn how to create a valuation framework for analyzing the financial performance of commercial and investment real estate.
2
Learn how to build your own risk analysis and development cost monitor within your models.
3
Evaluate the outcome of different valuation techniques and recognize the cost of capital for real estate and implement discounted cash flow techniques.
4
Learn the methods of practical application of valuation models in investment analysis.
5
Understand the most widely-practiced property income valuation techniques and be able to critically analyses a real estate investment proposal.

International Academy of Business and Financial Management
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The International Academy of Business and Financial Management™ is one of the world’s fastest growing professional association with more than 200,000 members, associates and affiliates in 145 countries. IABFM™ hosts and organizes certification training worldwide and offers exclusive board designations to candidates who meet the highest professional standards and assessment criteria. The IABFM is credited by the American National Standards Institute (ANSI) the International Standards setting authority.

Course Outline

Day 1
Real Estate Investment: Basic Concepts
→ Two General Classifications of Estates
→ Estates Not Yet in Possession (Future Estates)
→ Examples of Leasehold Estates
→ Interests, Encumbrances, and Easements
→ Methods of Title Assurance
→ Abstract and Opinion Method
→ The Title Insurance Method
→ Limitations on Property Rights
→ Notes and mortgages
→ Seller financing
→ Reconstructing a mortgage loan
Important mathematics in real estate
→ Compound Interest
→ Compound or Future Value
→ Yields on Investment Annuities
→ Calculating Compound Interest Factors
→ Equivalent Nominal Annual Rate (ENAR): Extensions
→ Solving for Annual Yields with Partial Periods: An Extension
→ Present Value
→ A Graphic Illustration of Present Value
→ Use of the Present Value of an Annuity Factors
→ Determining Yields, or Internal Rates of Return, on Investments
Residential housing projects - Single Family Housing: Pricing, Investment, and Tax Considerations
→ Overview
→ House Prices
→ Income and Employment
→ Renting versus Owning
→ Analysing expected house prices
→ Economic Base Analysis—Location Quotients
→ Capitalization Effects: Price Premiums
→ Investing in “Distressed Properties”
→ Financial Framework for Analysing Distressed Properties
→ Acquisition Phase
→ Holding Period Phase
→ Disposition Phase—Exit Strategies
→ Financing residential properties
Day 2
Residential housing projects - Underwriting and Financing Residential Properties
→ Underwriting Default Risk
→ Classification of Mortgage Loans
→ Conventional Mortgage Loans
→ Insured Conventional Mortgage Loans
→ FHA Insured Mortgage Loans
→ VA Guaranteed Mortgage Loans
→ The Underwriting Process
→ Borrower Income
→ Verification of Borrower Assets
→ Assessment of Credit History
→ Estimated Housing Expense
→ Other Obligations
→ Compensating Factors
→ The Underwriting Process Illustrated
→ Conventional and Insured Conventional Mortgages
→ FHA Insured Mortgages
→ Guaranteed Mortgages
→ Underwriting and Loan Amounts—A Summary
→ The Closing Process
→ Fees and Expenses
→ Prorations, Escrow Costs, and Payments to Third Parties
→ Statutory Costs
→ Requirements under the Real Estate Settlement and Procedures Act (RESPA)
→ Settlement Costs Illustrated
→ Federal Truth-in-Lending (FTL) Requirements
→ Truth-in-Lending Sample Disclosure
→ Establishing the APR under Federal Truthin-Lending Requirements
→ ARMs and Truth-in-Lending Disclosure
Income-Producing Properties: Leases, Rents, and the Market for Space
→ The “Market” for Income-Producing Real Estate
→ Income Potential—Real Estate Assets
→ Vacancy
→ Underwriting Tenants
→ General Contents of Leases
→ Leases and Rental Income
→ Leases and Responsibility for Expenses (Recoveries)
→ Comparing Leases: Effective Rent
→ Developing Statements of Operating Cash Flow
Case Example: Office Properties
→ Rent Premiums and Discounts for Office Space
→ Pro Forma Statement of Cash Flow—Office Properties
→ Case Example: Industrial and Warehouse Properties
→ Pro Forma Statement of Cash Flow—Industrial/ Warehouse Properties
→ Case Example: Retail Properties
→ The Retail Leasing Environment
→ CAM Charges—Recoveries
→ Pro Forma Statement of Cash Flow—Retail Properties
Case Example: Apartment Properties
Valuation of Income Properties: Appraisal and the Market for Capital
→ Introduction
→ Valuation Fundamentals
→ Appraisal Process and Approaches to Valuation
→ Sales Comparison Approach
→ Income Approach
→ Capitalization Rate
→ Capitalization Rates—A Note of Caution
→ Discounted Present Value Techniques
→ Land Values: Highest and Best Use Analysis
→ Volatility in Land Prices
→ “Highest and Best Use” Analysis –V acant Site
→ “Highest and Best Use” Analysis – Improved Property
→ Mortgage-Equity Capitalization
→ Reconciliation: Sales Comparison and Income Capitalization Approaches
→ Exploring the Relationships between Changing Market Conditions, Cap Rates, and Property Values
→ A Closing Note on Cap Rates and Market Conditions
→ A Word of Caution—Simultaneous Effects of Real Market Forces and Interest Rates on Property Values
→ Leases: Valuation of a Leased Fee Estate
→ Cost Approach
→ Valuation Case Study—Oakwood Apartments
→ ARGUS Solution
Investment Analysis and Taxation of Income Properties (when investing in tax-paying countries)
→ Motivations for Investing
→ Real Estate Market Characteristics and Investment Strategies
→ The “Real Estate Cycle”
→ Investment Strategies
→ Market Analysis
→ Supply of Space
→ Market Rents
→ Forecasting Supply, Demand, Market Rents, and Occupancy
→ Making Investments: Projecting Cash Flows
→ Office Building Example
→ Base Rent
→ CPI Adjustment
→ Expense Stops
→ Net Operating Income
→ Expected Outlays for Replacements and Capital Improvements
→ Estimated Sale Price
→ Introduction to Investment Analysis
→ Internal Rate of Return (IRR)
→ Present Value
→ ARGUS Solution
→ Introduction to Debt Financing
→ Measures of Investment Performance Using Ratios
→ Before-Tax Cash Flow from Sale
→ Summary of Investment Analysis Calculations
→ Taxation of Income-Producing Real Estate
→ Taxable Income from Operation of Real Estate
→ Depreciation Allowances
→ Loan Points
→ Tax Liability and After-Tax Cash Flow
→ Taxable Income from Disposal of Depreciable Real Property
→ After-Tax Investment Analysis
→ After-Tax Cash Flow from Operations
→ After-Tax Cash Flow from Sale
→ After-Tax IRR
→ Effective Tax Rate
→ A Note about Passive Losses
→ Special Exceptions to PAL Rules
→ Approaches to Metro Area Market Forecasting: Basic Concepts and Data Sources
Day 3
Financial Leverage and Financing Alternatives
→ Introduction to Financial Leverage
→ Conditions for Positive Leverage - Before Tax
→ Conditions for Positive Leverage - After Tax
→ Break-Even Interest Rate
→ Risk and Leverage
→ Underwriting Loans on Income Properties
→ Market Study and Appraisal
→ Borrower Financials
→ The Loan-to-Value Ratio
→ The Debt Coverage Ratio
→ Other Loan Terms and Mortgage Covenants
→ Alternatives to Fixed Rate Loan Structures
→ Participation Loans
→ Lender Motivations
→ Investor Motivations
→ Participation Example
→ Sale-Leaseback of the Land
→ Effective Cost of the Sale-Leaseback
→ Interest Only Loans
→ Accrual Loans
→ Structuring the Payment for a Target Debt Coverage Ratio
→ Convertible Mortgages
→ Lender’s Yield on Convertible Mortgages
→ Comparison of Financing Alternatives
→ Monument Office Building Example - ARGUS Solution with a Loan
→ Other Financing Alternatives
Risk Analysis
→ Introduction
→ Comparing Investment Returns
→ Types of Risk
→ Due Diligence in Real Estate Investment Risk Analysis
→ Sensitivity Analysis
→ Partitioning the IRR
→ Variation in Returns and Risk
→ Retail Case Study - Westgate Shopping Center
→ Westgate Shopping Center Scenario Analysis
→ Westgate Shopping Center - ARGUS Analysis
→ Lease Rollover Risk
→ Market Rent
→ Industrial Case Study - Worthington Distribution Center
→ Solution with ARGUS
→ Risk and Leverage
→ A “Real Options” Approach to Investment Decisions
→ Traditional Approach to Land Valuation
Disposition and Renovation of Income Properties
→ Disposition Decisions
→ A Decision Rule for Property Disposition
→ IRR for Holding versus Sale of the Property
→ Return to a New Investor
→ Marginal Rate of Return
→ Refinancing as an Alternative to Disposition
→ Incremental Cost of Refinancing
→ Leveraged Return from Refinancing and Holding an Additional Five Years
→ Refinancing at a Lower Interest Rate
→ Other Disposition Considerations - Portfolio Balancing
→ Tax-Deferral Strategies upon Disposition
→ Installment Sales
→ Tax-Deferred Exchanges
→ Renovation as an Alternative to Disposition
→ Renovation and Refinancing
→ Rehabilitation Investment Tax Credits
→ Low-Income Housing
Day 4
Financing Corporate Real Estate
→ Lease-versus-Own Analysis
→ Leasing versus Owning—An Example
→ Cash Flow from Leasing
→ Cash Flow from Owning
→ Cash Flow from Owning versus Leasing
→ Return from Owning versus Leasing
→ Importance of the Residual Value of Real Estate
→ The Investor’s Perspective
→ A Note on Project Financing
→ Factors Affecting Own-versus-Lease Decisions
→ The Role of Real Estate in Corporate Restructuring
→ Sale-Leaseback
→ Refinancing
→ Investing in Real Estate for Diversification
→ Real Estate Asset Pricing and Capital Budgeting Analysis: A Synthesis
Financing Project Development
→ Introduction
→ Overview: The Planning Process
→ The Development of Income-Producing Property
→ Market Risks and Project Feasibility
→ Project Risks
→ Project Development Financing - An Overview
→ Lender Requirements in Financing Project Development
→ Loan Submission Information for Loan Requests - An Overview
→ Contingencies in Lending Commitments
→ The Construction or Interim Loan
→ Methods of Disbursement—Construction Lending
→ Interest Rates and Fees
→ Project Development Illustrated
→ Sensitivity Analysis, Risk, and Feasibility Analysis
Financing Land Development Projects
→ The Land Development Process—An Overview
→ Financing and Development
→ Lender Requirements in Financing Land Development
→ Detailed Cost Breakdowns
→ Residential Land Development Illustrated
→ Estimating Development Cost and Interest Carry
→ Repayment Schedule
→ Project Feasibility and Profitability
→ Project IRR and Net Present Value
→ Sensitivity Analysis
Structuring Real Estate Investments: Organizational Forms and Joint Ventures
→ Introduction
→ Sole Proprietorships
→ Partnerships
→ Limited Liability Companies
→ Corporations
→ Joint Ventures
→ Organizational Forms
→ Profit Sharing
→ Initial Capital Contributions
→ Sharing Cash Flow from Operations
→ Sharing of Cash Flow from Sale
→ Summary of Cash Flows Distributed in Each Operating Year
→ Cash Flow from Sale
→ IRR to Each Joint Venture Party
→ Variation on the Preferred IRR—IRR Lookback
→ Syndications
→ Use of the Limited Partnership in Private and Public Syndicates
→ Private Syndication Problem Illustrated
→ Financial Considerations - Partnership Agreement
→ Operating Projections
→ Statement of Before-Tax Cash Flow (BTCF)
→ Calculation of Net Income or Loss
→ Calculation of Capital Gain from Sale
→ Capital Accounts
→ Distribution of Cash from Sale of Asset
→ Calculation of After-Tax Cash Flow and ATIRR on Equity
→ Partnership Allocations and Substantial Economic Effect
→ Capital Accounts and Gain Charge-Backs
→ Use of the Limited Partnership in Private and Public Syndicates
→ Use of Corporate General Partners
→ Private versus Public Syndicates
→ Accredited Investors
→ Syndicates
→ Investment Objectives and Policies
→ Promoters’and Managers’Compensation
→ Investor Suitability Standards
Day 5
How can you list in the US as Real Estate Investment Trusts (REITs) ?
→ Introduction
→ Legal Requirements
→ Tax Treatment
→ Violation Penalties and Status Termination
→ Taxable REIT Subsidiaries
→ Types of Trusts
→ Equity Trusts
→ The Investment Appeal of Equity Trusts
→ Private REITs
→ Importance of FFO (Funds from Operations)
→ REIT Expansion and Growth
→ Important Issues in Accounting and Financial Disclosure: Equity REITs
→ Tenant Improvements and Free Rents: Effects on FFO
→ Leasing Commissions and Related Costs
→ Use of Straight-Line Rents
→ FFO and Income from Managing Other Properties
→ Types of Mortgage Debt and Other Obligations
→ Existence of Ground Leases
→ Lease Renewal Options and REIT Rent Growth
→ Occupancy Numbers: Leased Space or Occupied Space?
→ Retail REITs and Sales per Square Foot
→ Additional Costs of Being a Public Company
→ The Investment Appeal of Mortgage REITs
→ Financial Analysis of an Equity REIT Illustrated
→ Valuing REITs as Investments
→ Valuation of Midwestern America Property Trust
Real Estate Investment Performance and Portfolio Considerations
→ Introduction
→ The Nature of Real Estate Investment Data
→ Sources of Data Used for Real Estate Performance Measurement
→ NCREIF Property Index: Property Values
→ Data Sources for Other Investments
→ Cumulative Investment Return Patterns
→ Computing Holding Period Returns
→ Comparing Investment Returns
→ Risk, Return, and Performance Measurement
→ Risk-Adjusted Returns: Basic Elements
→ Calculating Portfolio Returns
→ Portfolio Risk
→ Example - Swap Office for Retail
Practical Case Study: Full Excel model of real estate investment decision analysis of a residential compound in Saudi Arabia including 40 villas with full details including assumptions, waterfall analysis, sensitivity analysis, development cost monitor, project return vs equity return, return on investment and investment management fees among others. It is the model that top professionals typically use in the region.

Who Should Attend?

This highly practical and interactive course has been specifically designed for
This course is aimed at people with several years’ real estate or finance/investment experience:
→ Real estate investors and analysts
→ Real estate managers
→ Planning and development professionals in real estate businesses
→ Property Developers
→ Bankers and lenders
→ Corporate financiers
→ Real Estate Portfolio managers
→ Finance managers and analysts
→ Property owners
→ Hedge fund managers
→ Mortgage brokers
→ Private banking Relationship managers responsible for Real Estate Investments
→ Anyone pursuing career in real estate

FAQ

What language will the course be taught in and what level of English do I need to take part in an LEORON training program?
Most of our public courses are delivered in English language. You need to be proficient in English to be able to fully participate in the workshop and network with other delegates. For in-house courses we have the capability to train in Arabic, Dutch, German and Portuguese.
Are LEORON Public courses certified by an official body/organization?
LEORON Institute partners with 20+ international bodies and associations.We also award continuing professional development credits (CPE/PDUs) for:1. NASBA (National Association of State Boards of Accountancy) 2. Project Management Institute PDUs 3. CISI credits 4. GARP credits 5. HRCI recertification credits 6. SHRM recertification credits
What is the deadline for registering to a public course?
The deadline to register for a public course is 14 days before the course starts. Kindly note that occasionally we do accept late registrations as well, but this needs to be confirmed with the project manager of the training program or with our registration desk that can be reached at +91 4 95 5711 or [email protected]
What does the course fee cover?
The course fee covers a premium training experience in a 5-star hotel, learning materials, lunches & refreshments, and for some courses, the certification fee and membership with the accrediting bodies.
Does LEORON give discounts?
Yes, we can provide discounts for group bookings. If you would like to discuss a discount on a corporate level, we will be happy to talk to you.

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  • Review:
    IAMM Internal Audit Maturity Model
    In recognition of their dedication and contribution supporting IKEA Saudi Arabia in arranging training programs during 2017 & 2018, looking forward for more development and exciting effort this year. On behalf of IKEA Saudi Arabia, THANK YOU!
    Dalal Kutbi
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    Certified Professional in Quality and Patient Safety
    Dating back to 2014, Mobily’s “LEORON” experience has grown from a single collaboration to a long-term partnership. We consider “LEORON” Institute as a strategic partner, whose contribution has been nothing but premium in equipping our staff with field-based knowledge and information. Past three years have resulted with an expanded collaboration with superior customer service and support. Best Regards,
    Turki S. Alsahaan
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    Certified Professional in Quality and Patient Safety
    Since the partnership was signed between BAE Systems Saudi Development & Training and LEORON in 2017, we have been working together to offer the Saudi market a complete portfolio of training solutions benefiting from the wide and extensive experience of both parties. Recognizing the great success of this partnership, we are looking for further collaborations in the future that will position both companies as one of the leading training providers in Saudi Arabia. We thank the LEORON team for their full cooperation and continuing support, and look forward to further success together in the years to come.
    Emad Alrajih
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    Certified Professional in Quality and Patient Safety
    We have been working with LEORON for the past two years and will be working with them again this upcoming year. The programs they delivered were fruitful and exciting and our organization has received positive feedback from the participants. What our organization aims to do is to provide at no cost training for all the private sector employees so that they may benefit from our offered programs in Innovation and Professional development. Leoron has helped us achieve this goal. We look forward to continuing this service and wish them the best of luck. Regards,
    Nasser M. Al-Subaie