Introduction to Real Estate Finance and Investment

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September 25, 2018 @ 12:00 pm
October 4, 2018 @ 2:00 pm
ULI Learning


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September 25, 27 and October 2, 4, 2018

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 investment and financing decisions. From there the program will progress 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, 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 course is recommended for non-finance real estate professionals who wish to gain a basic understanding of real estate finance that also will help them get more out of their professional interactions.

Module 1

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

-Time value of money (TVM)

-Risk and return

  • Basic TVM calculations

-Compounding and discounting

-Financial functions in Excel


Module 2

  • Financial leverage: implications and examples
  • Key features of commercial mortgages
  • Mortgage Calculation

-Monthly payment and Annual Debt Service

-Outstanding Loan Balance

-Annual Percentage Rate (APR)

  • Mortgage underwriting

-Loan-to-value ratio

-Debt coverage ratio

-Debt yield

  • Mezzanine Debt vs. Second Mortgage

Module 3

  • Basics of Real Estate Investment
  • Net operating income (NOI) and Pro Forma
  • Real Estate Valuation

-Direct Capitalization Approach

-Discounted Cash Flow (DCF) Approach

  • Performance Measures

-Net Present Value (NPV)

-Internal Rate of Return (IRR)

-Cash on Cash

-Equity Multiple

  • Introduction to Investment Return Waterfalls


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. In addition to teaching courses, Tu coaches student teams in local and national competitions.  USD MSRE students won six first-place and two second-place victories in the ARGUS University Challenge in the eight years the event was held.

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). 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 ARGUS Valuation-DCF, ARGUS Enterprise and ARGUS 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