RE6062 Private Real Estate Investment – Part IInstructor: Roger Brown
The essence of this course (the first in a 3 part series of courses) is to develop a rigorous understanding of the acquisition and operation of individually held parcels of real property. Emphasis will be on the owner's position, his motives, incentives, risk and reward. While students whose goal is to obtain employment with a major real estate firm will benefit from these courses, the orientation is toward the individual entrepreneur. This course is designed for the student who wishes to acquire property in his own name or in the name of a small controlled entity. This course is a basic investment analysis course that leads to graduate level complementary courses.
This course aims to:
This course covers location theory and conventional performance measures to acquaint the student with the tools required to be a successful real estate entrepreneur. Emphasis will be on exploring the factors that enhance or diminish the owner's position, examine how his motives are impacted by internal and external concerns, incentives, risk and reward. The two questions that make up the central core of the course series are: What is it that we value and how do we value it? In the case of the former the course will concentrate on the economics of property rights; for the latter we engage the quantitative methods required to make rational decisions.
Lecture 1 - Theory of Rent Determination - Why location is important
Lecture 2 - Elaboration of the bid rent curve to many uses in three dimensions
Lecture 3 - The Regulatory Influence - How market forces are impacted by government
Lecture 4 - Theory v. Practice - Case study in meeting regulatory challenges
Lecture 5 - Rules of Thumb - Introduction to real estate mathematics
Lecture 6 - Use of data analysis to supplement on-the-ground observation
Lecture 7 - Multi-period Analysis of the income stream
Lecture 8 - Sophisticated Performance Measures
Lecture 9 - Critique of the IRR - Limitations of the most widely used (and abused) performance metric.
Lecture 10 - Elaboration of Jensen's Inequality to common real estate settings