Introduction to Real Estate Finance and Investment

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August 15, 2017 @ 12:00 pm
August 24, 2017 @ 2:00 pm
David Mulvihill, Vice President, Professional Development


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August 15, 17, 22, and 24, 2017

12:00 p.m. – 2:00 p.m. Eastern

Developed for non-finance professionals, this new ULI online program will provide a broad and solid introduction to the basics of real estate finance and investment. Held over four sessions, the course will begin with a general overview of real estate property types and capital sources. From there the program will progress to discussing basic analytical tools and performance measures. The workshop will acquaint students with fundamental real estate finance terms and concepts including: time-value-of-money, the capital stack, risk-return tradeoff, and financial leverage. Using examples and Excel spreadsheet, it will demonstrate important calculations in real estate finance and investment, such as internal rate of return (IRR), mortgage payment and loan balance, and property valuation. This hands-on course is recommended for non-finance real estate professionals who want to gain a basic understanding of real estate finance that also will help them get more out of their professional interactions.

Session 1

•Overview of real estate markets
•Capital sources: debt vs. equity
•Key financial concepts

-Time-value-of-money (TVM)
-Risk and return

•Basic time-value-of-money calculations

-Compounding and Discounting
-Compounding Frequency

Session 2

•Financial Leverage: Implications and Examples

•Commercial and Residential Mortgages

-Similarities and differences
-Main underwriting criteria

•Mortgage Calculation

-Monthly payment
-Annual Percentage Rate (APR)

•Mezzanine Debt vs. Second Mortgage

Session 3

•Basics of Real Estate Investment

•Performance Measures

-Internal Rate of Return (IRR)
-Cash on Cash
-Equity Multiple

•Real Estate Valuation

-Direct Capitalization
-Discounted Cash Flow (DCF) Analysis

•How Net Operating Income (NOI) is Derived

•The Real Estate Pro Forma Defined

Session 4

•Basics of Real Estate Development Finance

•Construction Financing vs. Permanent Financing

•Financial Analysis of a Development Project

•Performance Measures/Examples

-Internal Rate of Return (IRR)
-Equity Multiple

-Residual land value

•Investment Return Waterfalls

•Course Wrap Up


Charles TuCharles Tu
Professor of Real Estate
Burnham-Moores Center for Real Estate
University of San Diego
San Diego, California

Tu is the Daniel F. Mulvihill Professor of Commercial Real Estate at the Burnham-Moores Center for Real Estate at the University of San Diego (USD). Tu joined the USD faculty in 2004 and was appointed the academic director of the Master of Science in Real Estate (MSRE) program in 2010. He is also responsible for the curriculum of the undergraduate real estate major.

Tu’s research covers a wide range of topics, including housing valuation, smart growth and the new urbanism, sustainable and green buildings, commercial mortgage-backed securities (CMBS), real estate investment trusts (REITs), multifamily housing, retail shopping centers, and real estate education. He has published in many academic journals and for professional organizations such as the Urban Land Institute (ULI) and the Mortgage Bankers Association (MBA). Tu was a primary investigator of research projects sponsored by government agencies, including the U.S. Department of Energy, the U.S. Environmental Protection Agency, the California Energy Commission, and the District of Columbia Government. He currently serves on the editorial board of the Journal of Sustainable Real Estate.

Tu earned his PhD in business administration from the George Washington University (GWU) in 1999. He received the Chartered Financial Analyst (CFA) designation in 2000 and became a LEED Accredited Professional in 2009. He is ARGUS Software Certified (ASC) for both ARGUS Valuation-DCF and Developer. Before joining USD, Tu taught real estate and finance courses at GWU and California State University and Fullerton.


Members: $395
Nonmembers: $495
Govt./nonprofit member: $350
Govt./nonprofit nonmember: $465

Program Highlights

  • Overview of property types and capital sources
  • Analytical tools and performance measures
  • Time-value-of-money
  • Internal rate of return (IRR)
  • Real estate valuation methods
  • Residual land value
  • Financial analysis of a development project