Corproate Training Program

Introduction to Real Estate Finance

Course Overview

This training course is designed to provide the understanding of the real estate investment and finance. In order to take the advantage of profitable property finance opportunities, it is essential to be equipped with investment skills and essential financing techniques. At the end of this course, participant will have an understanding of the key drivers of real estate finance, how to value a project using various valuation techniques and how to critically analyse the financial statements to make an appropriate financial investment in a risk/return context

Course Agenda

Finance Statement Analysis

Understanding of basic financial statements and their importance in decision making process
Financial statement analysis of a company’s with special emphasis on profitability, liquidity, solvency and cash flows
Assessing and selecting a profitable real estate finance opportunity relating finance ratios to economic drivers

Case Study

In the first case study you perform financial statement analysis to take conclusions with respect to value creation, how to construct financial performance measures and the valuation implications of price earning ratios.

Real Estate Valuation Techniques

Time Value of Money in relation to real estate valuation
Understanding of discounted cash flow methods including NPV, IRR and discounted payback method
IRR & NPV: How calculated? What do they really mean?
What is an appropriate discount rate? What about the target rate of return?
What else will show whether it is a good deal?
Testing ‘what if’ and adding sensitivity/constraint analysis

Case Study

Perform valuation and comparison of two different real estate investment projects using NPV method and arrive at a decision that is best suitable to the company and maximize the shareholders’ wealth.

Types of Real Estate Valuation

Describe the various approaches to the valuation of real estate
Calculate the net operating income (NOI) from a real estate investment
Calculate the value of a property using the sales comparison and income approaches
calculate the after-tax cash flows, net present value, and yield of a real estate investment
Using the financial analysis tools learnt above, how identify and assess and profitable real estate investment
Due diligence process while selecting a real estate investment

Case Study

A scenario based valuation of a real estate investment taking into consideration the location, type of property, income potential and tax implication. Apart from finance calculation the qualitative factors affecting the due diligence process to be addressed during this exercise.

Day End Task

Home assignment will be given to practice the concepts learnt and how to apply them in real life. Marked assignments will be returned at the end the course.

Recommended/Provided Study Material

Comprehensive training slides, case studies and real life examples will be provided during the course.

Recommend reading for this course will include study material used in Chartered Financial Analysis (USA) Program. Relevant books are also available at training centre to have a look and purchase option is available.