Charting: While numbers in a spreadsheet are required, the interpretation can be difficult. These slides provide a brief overview of how to visually display, through graphics, quantitative data visually.
Custom Functions: P(Gain) was first introduced in the first edition of Foundations of Real Estate Financial Modelling. However, it is not a standard function in MS Excel. These slides demonstrate how to build P(Gain), and other custom functions, into the base of MS Excel.
MS Excel: A text on Real Estate Financial Modelling using MS Excel as the backbone would not be complete without lecture notes on MS Excel. The basics of MS Excel are introduced.
Amortization: The two largest assets on individual balance sheets are homes and cars, in general. The payments are typically constant throughout the life of the loan(s). The payment schedule is called an “Amortization Schedule”. Building and understanding this schedule is critical and is introduced.
Interest Rates: The single-largest performance enhancer/detractor in real estate is the cost of capital. The cost(s) are determined by the level of interest rates which govern the cost for funds at different risk levels and different time periods. How capital is priced is introduced.
Capital Structure and Leverage: Real Estate returns are magnified by using debt within the capital structure, i.e. combining equity and debt. The benefits (and horrors) of changes in capital structure and the percentage of debt vs equity (leverage) are discussed.
Project Valuation (Options): Building upon Discounted Cash Flow, project specifics and financial instruments, e.g. derivative options, are introduced. The ability to financially hedge a physical real estate asset is introduced.
