Understanding Key Principles of Real Estate Financial Modelling
Description
Real Estate Investments are unique in that they generate both rental income and capital appreciation, making cash flow modelling an essential tool for Real Estate Investors, Lenders, and Analysts.
On this course, we will use case studies to enhance the delegates understanding of Real Estate financial appraisals, and help them fully appreciate the theory behind the numbers. We will cover topics such as discounting, compounding, forecasting rental income and expenses, calculating net operating income (NOI), factoring in capital expenditures, modelling debt service, and determining the internal rate of return (IRR).
This course will provide you with a solid foundation for understanding and analysing real estate cash flows.
On this course, you will…
Study the financial concepts of compounding, discounting and in-perpetuity
Consider the importance of the timing and uncertainty of both fixed and growing income streams
Contrast different property yield metrics
Build-up risk premiums for discount rates, discuss the importance of liquidity, transparency and volatility
Compare and contrast time and money-weighted measures of return
Learn about valuation principles
Contrast value and worth
Discuss the importance and sourcing of inputs and outputs
Who will benefit from this course?
Professional Real Estate Transaction Managers
Asset Managers
Portfolio Managers
Recent graduates with exposure to real estate financial modelling
New employees with exposure to real estate financial modelling
People working in Argus, Anaplan or any commercial real estate software and would like to understand financial modelling key principles.
Course Outline
- 10:00 am - 4:00 pm
Day One
Real Estate Financial Mathematics Time Value of Money Net Present Value (NPV) Internal Rate of Return (IRR) Growth What Discount Rate? Certainty of a cash flow Liquidity Price, Value and Worth Comparing Price, Value and Worth Conventional Valuation Methods Term and Reversion, Layer Method Property Yields and Capitalisation Method Exit calculations across Europe Investment Appraisal Models Cash flow inputs: Rents, Yields, Growth Rates, Target Returns Cash-on-Cash and Equity Multiple Discount Rates & Exit Cap Rate Operating Assumptions Adding borrowing and analysing geared returns Model Interpretation and Analysis Sensitivity analysis and scenario analysis Growth and inflation Performance measures Contemporary issues for analysis (such as the rise in interest rates)
Lineup
Malcolm Frodsham
Director at Real Estate Strategies
Marvin Reichert
Co-Founder at BlueHill Estate Group
Tickets for good, not greed Humanitix dedicates 100% of profits from booking fees to charity
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