12/27/2024 9:13:00 AM	RE 62 Course Outline as of Fall 2022	New Course (First Version)
CATALOG INFORMATION
Discipline and Nbr:  RE 62	Title:  ADV. REAL ESTATE FINANCE
Full Title:  Advanced Real Estate Finance
Last Reviewed:2/14/2022

Units		Course Hours per Week			Nbr of Weeks	Course Hours Total
Maximum	3.00	Lecture Scheduled	3.00		17.5 max.	Lecture Scheduled	52.50
Minimum	3.00	Lab Scheduled	0		6 min.	Lab Scheduled	0
		Contact DHR	0			Contact DHR	0
		Contact Total	3.00			Contact Total	52.50
		Non-contact DHR	0			Non-contact DHR Total	0

Total Out of Class Hours:  105.00

Total Student Learning Hours: 157.50

Title 5 Category:  AA Degree Applicable
Grading:  Grade Only
Repeatability:  00 - Two Repeats if Grade was D, F, NC, or NP
Also Listed As: 
Formerly: 

Catalog Description:

In this course, students will focus on analyzing potential investment properties for buyers, sellers and lenders. Each stage of property analysis will be covered for properties ranging from single family rentals to large commercial. Real estate finance strategies will be applied to real-world situations with a focus on the practical application of these theories that matter the most to investors. This course applies toward the educational requirements for either a salesperson or broker's license. It also meets the California Department of Real Estate (DRE) education requirements for the Salesperson or Brokers license.

Prerequisites/Corequisites:

Recommended Preparation:
Eligibility for ENGL 1A or equivalent and Course Completion of RE 52 ( or RE 80E)

Limits on Enrollment:

Schedule of Classes Information
Description:

In this course, students will focus on analyzing potential investment properties for buyers, sellers and lenders. Each stage of property analysis will be covered for properties ranging from single family rentals to large commercial. Real estate finance strategies will be applied to real-world situations with a focus on the practical application of these strategies that matter the most to investors. This course applies toward the educational requirements for either a salesperson or broker's license. It also meets the California Department of Real Estate (DRE) education requirements for the Salesperson or Brokers license.

(Grade Only)
Prerequisites:
Recommended:Eligibility for ENGL 1A or equivalent and Course Completion of RE 52 ( or RE 80E)
Limits on Enrollment:
Transfer Credit:CSU;
Repeatability:00 - Two Repeats if Grade was D, F, NC, or NP

ARTICULATION, MAJOR, and CERTIFICATION INFORMATION

Associate Degree:		Effective:		Inactive:
Area:
CSU GE:	Transfer Area			Effective:	Inactive:
IGETC:	Transfer Area			Effective:	Inactive:
CSU Transfer:	Transferable	Effective:	Fall 2022	Inactive:
UC Transfer:		Effective:		Inactive:
C-ID:

Certificate/Major Applicable: Both Certificate and Major Applicable

COURSE CONTENT

Student Learning Outcomes:
At the conclusion of this course, the student should be able to:

1. Outline and analyze primary, secondary, and additional investment elements and their effect on financing strategies.

2. Identify and understand the different methods of structuring financial instruments.

3. List and utilize real estate investment performance measurements and ratios.

 

Objectives:

At the conclusion of this course, the student should be able to:

1. Discuss why investors choose to invest in real estate, what risks they are exposed to, and how the return on a real estate investment is calculated.

2. Describe how the value of income-generating properties is determined.

3. Evaluate the impact debt financing has on a real estate investment's risk and return and how leverage can be used to increase investment returns.

4. Examine the factors impacting estate development decisions, including cap rates, regulatory requirements, and costs.

5. Discuss the financing options available to real estate investors.

6. Satisfy the California DRE elective education requirement for salespersons.

7. Satisfy the California DRE mandatory education requirement for brokers.

Topics and Scope

I. Introduction to Real Estate Finance

    A. Finance as a discipline

    B. Relevance of finance as applied to value

II. Primary investment elements and their effect on financing strategies

    A. Time horizon

    B. Volume of investment activity

    C. Type of property

III. Secondary investment elements and their effect on financing strategies

    A. Cost of funds      

     B. Amortization period

    C. Amount of funds borrowed

IV. Additional investment elements and their effect on financing strategies

    A. Loan duration

    B. Loan fees

V. Structuring financial instruments

    A. Leverage

    B. Debt

    C. Equity

    D. Partnerships

VI. Real estate investment performance measurements and ratios

    A. Net income return on investment

    B. Cash return on investment

    C. Total return on investment

VII. Advanced real estate investment analysis

VIII. The valuation of real property

IX. Financial statements and schedules

X. Single family rental home

    A. Comparable sales analysis

    B. Cash flow analysis

XI. Single family home to multi-family conversion

    A. Alternative options

    B. Relationship between risk and reward

XII. Multifamily apartment complex

XIII. Single family home conversion to commercial office building

Assignments:

1. Reading between 15-30 pages per week

2. Case studies:

    A. single family rental house

    B. multi-unit home

3. Real estate investment analysis assignments

4. Class participation and performance or discussion board participation

5. Real estate investment research project

6. Chapter quizzes

7. Midterm and final exam

Methods of Evaluation/Basis of Grade.

Writing: Assessment tools that demonstrate writing skill and/or require students to select, organize and explain ideas in writing.		Writing 5 - 20%
Real estate investment research project
Problem solving: Assessment tools, other than exams, that demonstrate competence in computational or non-computational problem solving skills.		Problem Solving 5 - 20%
Real estate investment performance measurements and ratios
Skill Demonstrations: All skill-based and physical demonstrations used for assessment purposes including skill performance exams.		Skill Demonstrations 20 - 50%
Case studies
Exams: All forms of formal testing, other than skill performance exams.		Exams 20 - 50%
Chapter quizzes, midterm, and final
Other: Includes any assessment tools that do not logically fit into the above categories.		Other Category 0 - 10%
Attendance and participation

Representative Textbooks and Materials:

The complete Guide to Real Estate Finance for Investment Properties. Steve Berges. Wiley. 2004 (classic)

Real Estate Finance and Investments. William Brueggeman, Jeffrey D. Fisher. Mcgraw Hill. 2022

Print PDF