Class Packets

• Real Estate Finance Lecture Notes 2002: Professor Crocker H. Liu
• How to Use Excel for Financial Modeling Packet, 1999, Professor Crocker H. Liu

Grade Distribution: Grading is based on the class curve rather than the total number of points and adheres to the grading curve set by the Finance department. The professor has no control over this curve. This grade distribution is only an approximation

A (A, A-)	25%
B (B+, B, B-)	45%
C (C+, C, C-)	25%
D and F	5% (Given only if students haven't turned in assignments)

Grading Policy:

Case 1: Market Analysis	12%
Case 2: Housing Affordability	12%
Case 3: Backdoor-Frontdoor	12%
Case 4: Angus Cartwright	12%
Case 5: Real Estate Limited Partnerships	12%
Homework: Due at the beginning of class (1 problem set)	5%
Midterm Exam:	15%
Final Exam:	20%

Each of the mini-cases is an INDIVIDUAL case study.  Students must turn in assignments on date due by the beginning of class. No late submissions are allowed. Grading is based on the class curve. This means that if you score 60 out of a 100 points and yours is the top grade in the class, you receive an A.

Course Objective:This course is not designed to provide an overview of general real estate finance principles and practices. Rather, this course is tailored for the serious student who wants an in depth perspective of the theory and applications of financing and investing in real estate with an emphasis on commercial real estate. However, residential real estate will also be covered. This course is not a how to get rich quick in real estate with no money down.

Week	Date	Day	Topic	Assigned Readings/Assignment
1	1/22	Tu	R.E. Finance Process Real Estate Cycles	BF Chapter 1 - Overview of Real Estate Finance
1	1/24	Th	Real Estate Cycles	D. Guilkey, 1999, How Good Are MSA Forecasts M. Miles, 1997, A Foundation for Strategic R.E. Allocation M. Miles & D. Guilkey, 1998, A Tactical Look at the Space Mkt Index Torto Wheaton and GMAC, Real Estate Cycles and Outlook 2001 Case 1: Market Analysis
2	1/29 - 1/31	TuTh	Mortgages	BF Chapter 2 - Legal Considerations in Real Estate Finance BF Chapter 3 - The Interest Factor in Financing (Review) BF Chapter 4 - Fixed Rate Mortgages Homework Set 1: Chapter 4 - #2, #7, #8, #13, #15
3	2/05 - 2/07	TuTh	Mortgages (continued)	BF Chapter 5 - Adjustable Rate and Variable Payment Mortgages BF Chapter 6 - Underwriting & Financing Residential Properties BF Chapter 7 - Residential Financial Analysis Case 2: Housing Affordability Homework Set 2: Chapter 5 - #1, #2
4	2/12	Tu	Building Envelope
4	2/14	Th	Solvency	BF Chapter 11 - Financial Leverage & Debt Structure (up to p. 345) How to Use Excel for Financial Modeling Packet
5	2/19 - 2/21	TuTh	Solvency	Case 3: Backdoor-Frontdoor
6	2/26 - 2/28	TuTh	Cash Flow Analysis	BF Chapter 9 - Introduction to Leases, Projecting Cash Flows BF Chapter 10 - Investment and Risk Analysis Homework Set 3: Chapter 9 - #1, #2; Chapter 10 - #1,#2
7	3/05 - 3/07	TuTh	Cash Flow Analysis (continued)	Case 4: Angus Cartwright Case
8	3/11 - 3/15	TuTh	Spring Recess	Study for Midterm Exam
9	3/19	Tu	Midterm Review Session
9	3/21	Th	Midterm Exam	Students are allowed to bring in 2 pages of formulas (single-sided)
10-11		TuTh	Real Estate Partnerships	BF Chapter 12 - Partnerships, Joint Ventures, and Syndications S. Bergsman, 2001, Vulture Funds Present Declining Opportunities M. MacHarg, et al, 2001, Securities Regulation Forever Unregulated: A Primer for Private Fund Sponsors – Part I B. Vinocur, 1994, As Property Values Rebound General Partners Seek to Buy Out Small Investors on the Cheap Case 5: Real Estate Limited Partnerships
11		Tu	Valuation of Real Estate	BF Chapter 8 - Introduction to Income Producing Properties and Valuation Fundamentals
12		Th	Financing Alternatives	BF Chapter 11 - Financial Leverage & Debt Structure (from p. 346 - 366)
13-14		TuTh	Location Analysis
15	4/30 - 5/02	TuTh	Real Estate Development	BF Chapter 15 - Financing Construction Projects BF Chapter 18 - Financing Land Development Projects BF Chapter 12 - Partnerships, Joint Ventures, and Syndications

Final Exam: Final exam will be cumulative but will focus primarily on chapters and cases not covered on the midterm. Chapters not on the midterm that will be on the final include BF Chapter 7 - Residential Financial Analysis BF Chapter 8 - Introduction to Income Producing Properties and Valuation Fundamentals BF Chapter 9 - Introduction to Leases, Projecting Cash Flows BF Chapter 10 - Investment and Risk Analysis BF Chapter 11 - Financial Leverage & Debt Structure in addition to the following readings: S. Bergsman, 2001, Vulture Funds Present Declining Opportunities M. MacHarg, et al, 2001, Securities Regulation Forever Unregulated: A Primer for Private Fund Sponsors – Part I B. Vinocur, 1994, As Property Values Rebound General Partners Seek to Buy Out Small Investors on the Cheap as well as your knowledge on the following cases: Building Envelope Backdoor-Frontdoor Angus Cartwright Case Syndication Case Besides this, the exam will cover materials from the lectures. Given the nature of this material, the final exam will be more quantitative relative to the midterm.