Introduction to the Real Estate Development Process

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February 12 @ 1:00 pm
End:
February 28 @ 3:00 pm
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February 12, 14, 19, 21, 26, and 28, 2018
Online
1:00 p.m. – 3:00 p.m. Eastern

Real estate development is a complex and iterative process that relies on the skills, efforts, and knowledge, of multiple professional disciplines to be successful. This new ULI program presents the basic elements of the real estate development process in a convenient online format. Delivered over six sessions, this program is designed to introduce to public and private sector professionals, the fundamental steps and analyses that developers and other professionals engage in during the real estate development process.  The objective of the series is to provide a broad understanding of the development process from building a project budget to valuing raw land before purchase, to finance concepts used by lenders.

Each session is recorded and will be available for registrants to review for 60 days

Session One

Introduction
-Outline of items/topics covered
-Risk
-Demand
-Finance
-Types of developers and projects

Budgeting
-Feasibility
-Bar napkin from finance

 The Market Study
-Purpose of document
-Ways to quantify demand
-Project location and proximity to similar projects
-Absorption
-Key risks

Session Two

Project Valuation Methods
-Understanding NOI
-Appraisal
-Time value of money
-Defining and using cap rates

Residual land value
-Building on project valuation (to determine land value)
-Utility of Land Use
-Impacts of rising construction costs on land value

Site Selection
-Best practices
-Why this site and not that one
-Site limitations (zoning, geometry, environmental etc)

Session Three

Due Diligence
-Confirm assumptions in site selection
-Sample DD budget
-Project economics
-Entitlement risks/PERT

Real estate deal structures
-How projects get financed
-Lender requirements of developers
-Lenders triangle
-Partnership structures (and why)
-Profit split example with investor

Session Four

Entitlements
-Timelines and budget/project risks
-Review local, regional, state and federal permits
-Rezones/land use changes
-Reactionary zoning

Session Five

Introduction to Finance Tools
-Review terminology
-Review concepts of TVM (time value of money)
-Calculate Loan amount
-Calculate loan payoff amount
-Calculate project ROI and annual ROI (return on investment)
-Introduction to net present value (NPV)
-Introduction to discounted cashflow (DCF)

Session Six

Construction
-How to bid a project
-How to review bids
-Working with your contractor
-Risks and how to mitigate them
-Course Wrap up

Instructor

David H. Farmer
Principal
Keystone Development Advisors
Naples, Florida

David H. Farmer is a developer, licensed real estate Broker, certified planner, civil engineer, state certified general contractor and Department of Environmental Protection qualified stormwater management inspector.

Dave Farmer began his career in the development industry in 1989 with an engineering firm designing commercial and residential projects for private clients. A professional engineer, Farmer left the engineering field in 2000 to work fulltime for Keystone Communities overseeing the entitlement, design and construction of residential communities, resort facilities, and commercial projects. In 2002, after earning his Certified General Contractors license, he also became responsible for the permitting and construction of custom homes.

Following a large sale of entitled and developed residential lots in 2003, the company’s focus shifted from development to entitlement and infrastructure development. At this time Farmer took on the additional responsibility of site selection and acquisition for the company. In 2005, he was made a principal of the company and participated in both the rewards and costs of acquisition, entitlement, and development.

Farmer’s development experience includes both very successful projects and less successful projects. In the tradition of ULI, he feels it’s important to focus more on mistakes made and lessons learned when teaching the real estate development process. One learns quickly what not to do when you are spending your own money on development projects.

In 2008, Farmer and his development partner dissolved the original company and each went their own way. Today he works in Florida with a new partner on identifying development sites and helping investors develop property. Farmer has brokered more than $70 million in real estate transactions and entitled thousands of homes and millions of square feet of commercial property. His favorite quote is “Begin with the end in mind.”

Registration

ULI Members: $395
Nonmembers: $525
Govt./nonprofit ULI member: $350
Govt./nonprofit nonmember: $465

Program Highlights

  • Building project budgets
  • Market studies and their purpose
  • Project valuation methods
  • Residual land value
  • Project site selection
  • Due diligence
  • Aspects of deal structuring
  • Entitlements and permitting issues
  • Introductory financial analysis
  • Bidding and reviewing project construction bids