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Finance and Real Estate

Finance: Measuring Risk - Return Trade Off

Instructor: Pratish Patel

This workshop introduces participants to the concept of performance measurement in finance. Specifically, some of the questions, that the workshop tries to answer are:

  1. What is the goal for the total portfolio?
  2. What is the period for achieving that goal?
  3. Which kinds of risk are acceptable/unacceptable?
  4. How do you check/evaluate your risk management?
Mathematically, since the future portfolio value is random, the value is a random variable. This workshop will use common statistical concepts (like regression) to understand the performance. As a result, a minimum requirement for taking part in the workshop is a working knowledge of statistics. Additional knowledge in linear algebra, probability theory, calculus will be handy.

Tentative Course Outline

Topic Objectives
Lab 1: Introduction to Performance Measurement
  • Understand risk in a statistical fashion
  • Understand some of the properties of U.S. equity return
  • Understand how to measure risk-adjusted return
Lab 2: Mutual Funds
  • Understand the purpose of mutual funds
  • Understand how the investment act of 1940 is related to the mutual funds
  • Understand a sample prospectus of a mutual fund
  • Understand some of the jargon related to mutual funds
Lab 3: Performance Measurement
  • Understand how risk is measured in Morningstar
  • Understand CAPM
  • Understand Sharpe Ratio, Treynor Ratio, alpha
Lab 4: Summary
  • Simulate a market timing strategy
  • Use Excel to do performance measurement
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Finance: Real Estate Finance Lab

Instructor: Adam Gower

Adam Gower is a bilingual, 30-year veteran in real estate, banking, and finance who earned a Ph.D. in banking history, focusing on institutional risk mitigation. He has held senior management positions at some of the largest companies and institutions in the world and is recognized as an industry thought leader on the impact of crowd funding on real estate. During the 1990’s he lived in Japan, working as the President and CEO of a major Hollywood studio developing their real estate portfolio throughout the Asia Pacific Region. After the financial crisis of 2008 had taken hold, Dr. Gower advised major regional banks and the world's largest private equity fund on their asset disposition strategies, assisting them to divest of large portfolios of real estate collateralized loans, and personally transacting in excess of $1.5 billion in real estate of all types. More

Dr. Gower lives and works in California and teaches the only fully accredited course in the country that focuses on Crowd Fund Real Estate investment, a transformational Fintech solution to real estate finance. His first book Jacob Schiff and the Art of Risk, (New York: Palgrave Macmillan, 2018) examines how investment banks mitigated risk in the early 20th Century and his work linking regulatory changes of today with practices described in this book are considered by many as being groundbreaking. His second book, Leaders of the Crowd, (New York: Palgrave Macmillan, 2018) is based on his internationally syndicated podcast series at the National Real Estate Forum. Dr. Gower is known as the creator of The Crowd Fund Real Estate Investor, a free resource for news, training, and online courses focused on educating a new generation of High Net Worth individuals and families, accredited and non-accredited investors alike, in how to prudently invest in real estate for yield, while prioritizing principal preservation.

Real Estate Finance Lab - Part One

Course objective is to learn key financial terms for REAL ESTATE deals using CROWD FUNDING. Participants will be exposed to online investment platforms that utilize financial terminology specific to the real estate industry. Key points of financial analysis and underwriting will be examined to enable participants to compare any deal against another that they look at online.

LEARNING OBJECTIVES: Practical engagement in preparing and analyzing pro-forma using 8 Key Concepts that open every door to real estate analysis and investment.

Labs 1 & 2 - The Eight Keys

  1. Net Operating Income
  2. Capitalization Rate
  3. Returns
  4. Equity Multiple
  5. Internal Rate of Return
  6. Preferred Return
  7. Promote & Fees
  8. Leverage
The eight keys section involves a deep dive into core concepts that are used by every developer, across every real estate type irrespective of the development strategy employed, to structure a deal, evaluate its viability, and to describe the deal to investors and other financiers. Incorporating spreadsheet examples, this section is heavily oriented to financial analysis, and is broken down into varying levels of complexity to enable the participant to learn complicated concepts at rudimentary levels as well as to see how they are applied by professionals.

In Class Work: Dive into multiple deals across multiple platforms and compare different assets against each other to establish analysis of relative risk-return profiles for investment using financial modeling.

Real Estate Finance Lab - Part Two

Course objective is to learn all aspects of how capital is raised for REAL ESTATE deals using CROWD FUNDING techniques as have become available as a result of the passage of the JOBS Act of 2012 and associated changes in regulations. The state of the industry today will be examined in detail, and a comprehensive examination of the origins of the JOBS Act and crowd fund real estate industry will be woven throughout the course.

LEARNING OBJECTIVES: To provide participants with awareness of real estate relating to:

  • Overview of the new industry of raising capital through, and investing in, crowd fund real estate.
  • Major actors or groups in the real estate finance, including developers, investors, lenders, online marketplaces, fintech participants - their roles, approaches as part of the process, and conflicting and parallel points of view.
  • Detailed examination of the key elements needed to understand every real estate deal.
  • Consideration of cycles and how to understand where we are in them.
  • Case study examination of the due diligence process a developer engages in to underwrite deals.

Tentative Course Outline

Topic Objectives
Lab 1: Cycles
  • The laws surrounding Crowd Fund Real Estate have only been in existence since 2012, and only in practical application since around 2014. No matter when one embarks on real estate investing, understanding that prices go up and down, sometimes by very large swings, is an essential foundation for pragmatic investing and wealth preservation.

  • This section looks at the fact that cycles exist, whether the Crowd Fund Real Estate sector has experienced one or not, examines the factors that drive cycles, and provides insights about how to mitigate related risks.

  • Preamble Real estate in the United States has been the domain of primarily the ultra-wealthy for almost 80 years. This section examines the main reasons why the new generation of investor, made possible by Crowd Fund Real Estate, might consider investing in the American real estate, and who some of the wealthiest real estate developers are in the US. The idea that real estate follows ‘critical paths’ is examined as a foundation for simplifying what could otherwise be seen to be a complicated industry to master.

  • The industry is laid out in this introductory section as being a combination of only 5 types of real estate, 4 development strategies, 8 phases of development, and 8 key concepts that unlock every real estate deal. Here the participant is reassured that while the industry is broad, it can be broken down into components making what otherwise could be an intimidating learning process appear more manageable.

  • Finally, the principle is introduced that the investor, who is not actually developing real estate, need only double check someone else’s work-product further facilitating the process of prudent investment.

  • In Class Work: Review of online marketplaces and examination of real estate deals and associated jargon.
Lab 2: Mutual Funds
  1. Office
  2. Industrial
  3. Retail
  4. Residential
  5. Hospitality
  • Having broken the industry down into its component parts, the Principles of Crowd Fund Real Estate investment course starts drilling down on those parts by examining the five main types of real estate. This section gives a general overview of the difference between varying standards of real estate (Class A to Class C), and of different sub-categories within each type.

  • The section is designed to lay the groundwork for how an investor might start to narrow their interests down to specific real estate type with which they are most comfortable in order to begin implementing their investment strategy.

  • In Class Work: Examination of deals online that reflect the different asset classes and a review of the differences in types of deal.
Lab 3: Four Development Strategies
  1. Core
  2. Core Plus
  3. Value Add
  4. Opportunistic
  • Along with the four development strategies, all of which can be overlaid on to the five types of real estate previously covered, is an analysis of how they compare in their relative risk-return profiles.

  • The participant is encouraged to question marketplace definitions commonly used in the industry. There is no central ‘school’ of real estate; all participants base their understanding of key terms and concepts on their own personal background and experience, not on any centralized authority. Consequently, participants are taken through the four development strategies understanding that between each area grey areas and that, when in doubt, ask a sponsor for more information.

  • In Class Work: Examination of deals online to recognize the different investment strategies and conduct evaluations of each type of deal paying attention to risk return profiles.
Lab 4: Eight Phases of Development
  1. Location of Asset
  2. Business Plan
  3. Feasibility Study
  4. Contract Negotiations
  6. Formal Commitment
  7. Development
  8. Completion & Management
  • The driving principle covered in this course is that real estate development is complicated, multi-faceted and requires deep understanding at every level to be successful. However, the participant is taught that as an investor they are not actually developing real estate themselves and so the only thing that they can do is to double check the sponsor’s work product.

  • The eight phases of development of broken down and it is revealed that the only phase that the investor can actively engage in is a review of the Due Diligence phase. This lesson provides a platform for the investor to understand the limitations of their role in a project but lays out the groundwork for what they need to do to be successful.
  • In Class Work: Review deals case studies to compare the level of due diligence that different operators provide and the related ability to measure and mitigate investment risk.
Labs 5 & 6: Due Diligence
  1. Project Description
  2. Legal Review
  3. Title
  4. Contracts
  5. Site Description
  6. Regulatory Analysis
  7. Market Analysis
  8. Cost Assumptions
  9. Proforma
  10. Timeline
  11. Capital
  • The due diligence section covers, in considerable detail, every key part of the underwriting process that a sponsor will have examined before committing to the deal, and that the investor can review and double check for precision and reliability.

  • This section incorporates extensive use of case studies, spreadsheets, and data to explain the broad array of due diligence items a developer must cover in their analysis of any deal. In so doing, the investor is taught what to look for to ensure that a sponsor has been thorough in their work, as well as provided with tools for double checking key assumptions.
  • In Class Work: Identify factors involved in specific deals that reflect different due diligence risks and derive opinions regarding sponsor competence based on results.
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Enrollment Info

Dates Program Fee Apply Online
July 1 - 31 $1,550* Enroll Now
*Transportation, housing and meals not included
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