CREFM

Certified Real Estate Financial Modeller

→ Two General Classifications of Estates
→ Estates Not Yet in Possession (Future Estates)
→ Examples of Leasehold Estates
→ Interests, Encumbrances, and Easements
→ Methods of Title Assurance
→ Abstract and Opinion Method
→ The Title Insurance Method
→ Limitations on Property Rights
→ Notes and mortgages
→ Seller financing
→ Reconstructing a mortgage loan

→ Compound Interest
→ Compound or Future Value
→ Yields on Investment Annuities
→ Calculating Compound Interest Factors
→ Equivalent Nominal Annual Rate (ENAR): Extensions
→ Solving for Annual Yields with Partial Periods: An Extension
→ Present Value
→ A Graphic Illustration of Present Value
→ Use of the Present Value of an Annuity Factors
→ Determining Yields, or Internal Rates of Return, on Investments

→ Overview
→ House Prices
→ Income and Employment
→ Renting versus Owning
→ Analysing expected house prices
→ Economic Base Analysis—Location Quotients
→ Capitalization Effects: Price Premiums
→ Investing in “Distressed Properties”
→ Financial Framework for Analysing Distressed Properties
→ Acquisition Phase
→ Holding Period Phase
→ Disposition Phase—Exit Strategies
→ Financing residential properties

→ Underwriting Default Risk
→ Classification of Mortgage Loans
→ Conventional Mortgage Loans
→ Insured Conventional Mortgage Loans
→ FHA Insured Mortgage Loans
→ VA Guaranteed Mortgage Loans
→ The Underwriting Process
→ Borrower Income
→ Verification of Borrower Assets
→ Assessment of Credit History
→ Estimated Housing Expense
→ Other Obligations
→ Compensating Factors
→ The Underwriting Process Illustrated
→ Conventional and Insured Conventional Mortgages
→ FHA Insured Mortgages
→ Guaranteed Mortgages
→ Underwriting and Loan Amounts—A Summary
→ The Closing Process
→ Fees and Expenses
→ Prorations, Escrow Costs, and Payments to Third Parties
→ Statutory Costs
→ Requirements under the Real Estate Settlement and Procedures Act (RESPA)
→ Settlement Costs Illustrated
→ Federal Truth-in-Lending (FTL) Requirements
→ Truth-in-Lending Sample Disclosure
→ Establishing the APR under Federal Truthin-Lending Requirements
→ ARMs and Truth-in-Lending Disclosure

→ The “Market” for Income-Producing Real Estate
→ Income Potential—Real Estate Assets
→ Vacancy
→ Underwriting Tenants
→ General Contents of Leases
→ Leases and Rental Income
→ Leases and Responsibility for Expenses (Recoveries)
→ Comparing Leases: Effective Rent
→ Developing Statements of Operating Cash Flow
Case Example: Office Properties
→ Rent Premiums and Discounts for Office Space
→ Pro Forma Statement of Cash Flow—Office Properties
→ Case Example: Industrial and Warehouse Properties
→ Pro Forma Statement of Cash Flow—Industrial/ Warehouse Properties
→ Case Example: Retail Properties
→ The Retail Leasing Environment
→ CAM Charges—Recoveries
→ Pro Forma Statement of Cash Flow—Retail Properties
Case Example: Apartment Properties

→ Introduction
→ Valuation Fundamentals
→ Appraisal Process and Approaches to Valuation
→ Sales Comparison Approach
→ Income Approach
→ Capitalization Rate
→ Capitalization Rates—A Note of Caution
→ Discounted Present Value Techniques
→ Land Values: Highest and Best Use Analysis
→ Volatility in Land Prices
→ “Highest and Best Use” Analysis –V acant Site
→ “Highest and Best Use” Analysis – Improved Property
→ Mortgage-Equity Capitalization
→ Reconciliation: Sales Comparison and Income Capitalization Approaches
→ Exploring the Relationships between Changing Market Conditions, Cap Rates, and Property Values
→ A Closing Note on Cap Rates and Market Conditions
→ A Word of Caution—Simultaneous Effects of Real Market Forces and Interest Rates on Property Values
→ Leases: Valuation of a Leased Fee Estate
→ Cost Approach
→ Valuation Case Study—Oakwood Apartments
→ ARGUS Solution

→ Motivations for Investing
→ Real Estate Market Characteristics and Investment Strategies
→ The “Real Estate Cycle”
→ Investment Strategies
→ Market Analysis
→ Supply of Space
→ Market Rents
→ Forecasting Supply, Demand, Market Rents, and Occupancy
→ Making Investments: Projecting Cash Flows
→ Office Building Example
→ Base Rent
→ CPI Adjustment
→ Expense Stops
→ Net Operating Income
→ Expected Outlays for Replacements and Capital Improvements
→ Estimated Sale Price
→ Introduction to Investment Analysis
→ Internal Rate of Return (IRR)
→ Present Value
→ ARGUS Solution
→ Introduction to Debt Financing
→ Measures of Investment Performance Using Ratios
→ Before-Tax Cash Flow from Sale
→ Summary of Investment Analysis Calculations
→ Taxation of Income-Producing Real Estate
→ Taxable Income from Operation of Real Estate
→ Depreciation Allowances
→ Loan Points
→ Tax Liability and After-Tax Cash Flow
→ Taxable Income from Disposal of Depreciable Real Property
→ After-Tax Investment Analysis
→ After-Tax Cash Flow from Operations
→ After-Tax Cash Flow from Sale
→ After-Tax IRR
→ Effective Tax Rate
→ A Note about Passive Losses
→ Special Exceptions to PAL Rules
→ Approaches to Metro Area Market Forecasting: Basic Concepts and Data Sources