| Course Title: | Analysis of Commercial Real Estate Opportunities |
|---|---|
| Course Number: | CRIA550 |
| Course Description: | This course presents issues and methods that will enable Realtors to understand how key legal and financial factors (in particular, mortgage financing and taxation) external to the underlying economics of the property can significantly influence purchase decision-making, whether for investment purposes or owner-occupant reasons. |
| Course Prerequisites: | Be proficient with a real estate financial calculator such as a HP 12C or 10BII. |
Syllabus
Course Information
Course Specific Requirements
Enter content here, if necessary.
Textbooks and Resources
Required Textbooks
The following books are required for this course:
Real Estate Investing For Dummies
2nd Edition
by Eric Tyson and Robert S. Griswold CRE, CCIM, CPM, GRI, PCAM
© 2009 Wiley Publishing, Inc
Commercial Real Estate Financing Basics
by Gary W. Hutto
© 2000 Mortgage Bankers Association of America
APA citation
Additional resources used for this class
Regarding Commercial Real Estate Financing Basics, Chapters 2, 3, 4, 5, and 6 are available in Course Resources as PDF files.
Note
Real Estate Investing For Dummies
This textbook may be purchased from a wide variety of sources, in print format (new or used), as an ebook, or as a rental. Below are some options for purchase or rental.
- Wiley (Publisher): http://www.wiley.com/WileyCDA/WileyTitle/productCd-047028966X.html
- Barnes and Noble (including Nook): http://www.barnesandnoble.com/w/real-estate-investing-for-dummies-eric-tyson-mba/1100297503
- Amazon (Kindle): http://www.amazon.com/Real-Estate-Investing-Dummies-Edition/dp/047028966X
Please ensure that you purchase this text prior to the beginning of the course. If you elect to purchase a print copy of this book, you should allow sufficient time for shipping.
Commercial Real Estate Financing Basics
This textbook may be purchased from a wide variety of sources, in print format (new or used), as an ebook, or as a rental. Below are some options for purchase or rental.
Please ensure that you purchase this text prior to the beginning of the course. If you elect to purchase a print copy of this book, you should allow sufficient time for shipping.
Terminal Course Objectives
REALTOR® University course content is constructed from curriculum guides developed for each course that are in alignment with specific Terminal Course Objectives. The Terminal Course Objectives (TCOs) define the learning objectives that the student will be required to comprehend and demonstrate by course completion. The TCOs that will be covered in detail each week can be found in the Objectives section for that particular week. Whenever possible, a reference will be made from a particular assignment or discussion back to the TCO that it emphasizes.
1
Given a real estate investment prospectus, the student will be able to acquire detailed knowledge of various alternative investment vehicles and aid a student in his or her evaluative and transactional activities into the support providing for investor decision-making.
2
Given the opportunity to finance real estate investment, the student will be able to develop a knowledge base on how capital stacking of equity and debt components are sourced, to understand how various investment initiatives are assembled, and to use the information to counsel a client in making an investment property decision and how it should be acquired.
3
Given a real estate asset for purchase, a student will learn how to translate investment and physical characteristics of a property into the particular inputs required for a loan application and lender underwriting.
4
Given that a student has anaytical skills, the student will then learn to identify and incorporate key elements on an investor loan and ancillary documentation, to understand how efforts to secure the loan and operate under the loan would impact the Realtor’s evaluation of a property investment, and how the Realtor can expand acquistion services to a client with the knowledge of financing.
5
Given an income property, the student will learn how tax issues can significantly impact upon the investment scenario, how the familiarity with the mechanics of calculating tax issues and the financial impact from both an operations and disposition standpoint and a better depth of tax basis, recognition of gains, capital gains taxes and recapture taxes in making investment decisions.
6
Given a situation that the student’s client is contemplating the purchase of a commercial property, the student will learn the financial and tax aspects of leasing vs. buying, the impact of GAAP and IRS rules on such decisions, how to use the information to make strategic considerations and mechanics of a sale/lease-back, and how to use the information to evaluate the mechanics of an installment sale.
7
Given the situation of selling investment property, the student will learn alternative strategies to an outright sale by the use of the IRS Section 1031 and to counsel a client if a 1031 tax deferred exchange is appropriate and how the Realtor can help facilitate the process for a client.
8
Given the situation of a client contemplating the purchase of investment real estate, the course will enable a student to examine the various ways a Realtor can plan for and analyze the impacts of financing and taxation upon investment cash flows, and examine the ways that financing and taxation can impact distributable returns and Return on Investment (ROI) metrics.
Course Schedule
| Week, TCOs, and Topics | Readings and Class Preparation | Activities and Assignments |
|---|---|---|
Week 1 TCO 1 Interest Rates and Loan Products |
| Homework: Interest Rates and Rates on Loans Course Project: Introduction Graded discussion topics |
Week 2 TCO 2 Capital Stacking of Equity and Debt |
| Homework: Calculating Investment Returns Using Current Financing Costs Graded discussion topics |
Week 3 TCOs 3 and 4 The Commercial Loan Application |
| Graded discussion topics |
Week 4 TCOs 5 and 8 Acquisitions and Dispositions |
| Graded discussion topics |
Week 5 TCOs 5, 6, and 8 Taxation Issues, GAAP and FASB 13 |
| Course Project Graded discussion topics |
Week 6 TCO 6 and 8 Alternative Financing Options/Sale-Leasebacks/Installment Sales |
| Homework: Financial Analysis on Sale-Leaseback and Installment Sales Graded discussion topics |
Week 7 TCO 7 1031 Tax Deferred Exchange |
| Graded discussion topics |
Week 8 All TCOs Final Exam |
| Final Exam |
Due Dates for Assignments & Exams
Unless otherwise specified, the following applies.
- Access to all weeks begins on Sunday at 12:01 a.m. mountain time (MT).
- All assignments are to be submitted by Day 6, 11:59 p.m. M.T. of the specified week that they are due.
- All quizzes and exams are to be completed on or before Sunday at the end of the specified week that they open, 11:59 p.m. (MT).
Assignment Values and Letter Grades
The maximum score in this class is 1,000 points. The categories, which contribute to your final grade, are weighted as follows. Remember for all assignments when showing multiplication please use the "x" sign and not binary * sign. For instance, correct format 2x3 = 6. Incorrect format 2*3 =6.
| Assignment | Points | Weighting |
|---|---|---|
| Discussions (Weeks 1-7; 20 points each) | 140 | 14% |
| Homework (Weeks 1, 2, and 6; 70 points each) | 210 | 21% |
| Course Project (Week 5) | 300 | 30% |
| Final Exam | 350 | 35% |
| Total Points | 1,000 | 100% |
All of your course requirements are graded using points. At the end of the course, the points are converted to a letter grade using the scale in the table below.
| Letter Grade | Points | Percentage |
|---|---|---|
| A | 930–1,000 | 93% to 100% |
| A- | 900–929 | 90% to 92.9% |
| B+ | 870–899 | 87% to 89.9% |
| B | 830–869 | 83% to 86.9% |
| B- | 800–829 | 80% to 82.9% |
| C+ | 770–799 | 77% to 79.9% |
| C | 730–769 | 73% to 76.9% |
| C- | 700–729 | 70% to 72.9% |
| D+ | 670–699 | 67% to 69.9% |
| D | 630–669 | 63% to 66.9% |
| D- | 600–629 | 60% to 62.9% |
| F | 599 and below | Below 60% |
Late Assignment Policy
Late work is strongly discouraged. Turning in work late can impair your chances of success in the course. However, REALTOR® University understands that life and "emergencies" do happen, and thus, we offer this late policy:
For serious emergencies, your instructor will decide whether your late work may be accepted for full or reduced credit. Serious emergencies include: serious illness, accidents, natural disasters, eCollege server outages, etc. E-mail your instructor the information about your emergency and request approval to make up the assignment, lab, quiz, or exam. If you receive approval, make up the work according to the plan set by you and your instructor.
For all other matters, i.e. work, technical, or other personal issues, your instructor will decide whether your late work may be accepted. Your instructor will impose a per diem late penalty of 5% of the assignment points per day up to seven days. For late work make-up which is not emergency-based, you should request approval BEFORE the final deadline. If homework solutions are shared with the class, your instructor reserves the right to decline to accept late work after the sharing of the solutions, or to require that an alternative assignment be completed, if one is available. Only one non-emergency late submission will be allowed per student per course.
This late work policy applies to all graded assessments (including Final Exams) in the course with the exception of the discussion threads, which require approval of the College faculty management administrators. See the "Policies" item in Course Home for information regarding the discussion threads make-up policy.
Discussion Requirements
In the Discussion areas of the course, you, as a student, can interact with your instructor and classmates to explore questions and comments related to the content of this course. Discussions will always close Sunday, 11:59 p.m. mountain time (MT).
A successful student in online education is one who takes an active role in the learning process. You are, therefore, encouraged to participate in the discussion areas to enhance your learning experience throughout each week.
The discussions will be graded for
1. frequency—the number and regularity of your discussion comments; and
2. quality—the content of your contributions.
Frequency—the number and regularity of your contributions. Students are expected to log into the course and post (respond) in the discussion topics on a minimum of three separate days per week in each graded discussion, beginning no later than Wednesday.
Quality—the content of your contributions. Examples of quality posts include
- providing additional information to the discussion;
- elaborating on previous comments from others;
- presenting explanations of concepts or methods to help fellow students;
- presenting reasons for or against a topic in a persuasive fashion;
- sharing personal experiences that relate to the topic; and
- providing a URL and an explanation for an area you researched on the Internet.
Full credit is awarded when both high quality and required frequency are met.
For policy on discussions (and all other policies), please review the information contained in Policies under the Course Home section of your course.
Plagiarism
Plagiarism is a violation of the Academic Integrity code of this institution and will not be tolerated. The plagiarism policy applies to every aspect of REALTOR®University coursework including threaded discussions, exams, quizzes, essays, assignments, etc. It is important that students fully cite any outside ideas, text and visual aides they reference in that work.
If you copy from, rely on, or paraphrase from your text or from any other source, you must include in-text citations and complete end-of-text citations. For any source, you must include the proper reference material including the full URL and date accessed if the source is from the Web. For help, see the APA Citation Policy and Materials section below. Failure to cite completely in-text and at the end of the paper is a violation of the Academic Standards. Refer to your Student Handbook or the Policies item under Course Home to read the policy.
For a complete explanation of REALTOR® University's Academic Integrity Policy, please see the Policies item under Course Home. For additional information see your student handbook, which is available in the Student Services website.
APA Citation Policy and Reference Materials
The REALTOR® University citation policy is that all students should use APA citation style for all REALTOR® University assignments and projects. If you have questions, we recommend using the following APA reference materials.
APA Reference Materials
American Psychological Association (APA) Style Website
This website provides answers to frequently asked questions and lists APA manuals, style guides, and software available for sale. Purchase is optional. Two good references are Concise Rules of APA Style and the current edition of the Publication Manual of the American Psychological Association.
Frequently Asked Questions
When are grades calculated, and how can I view my grades?
- You must complete any quizzes and post your written assignments (if necessary) to the weekly Dropbox by Sunday 11:59 p.m. (MT) each week, except Week 8 which closes at 11:59 p.m. (MT) Saturday.
- Once your work is reviewed, you should see comments and total points for each assignment in the Gradebook. Instructors should have Discussion work graded by the following Tuesday and all other assignments by the following Friday.
- You may check your progress at any time by going to the Gradebook, selecting the week and then your name.
- Click on the points earned for each assignment in the Gradebook to see any instructor comments.
What should I do if a discrepancy is found with my grade?
- Double-check the error and try to determine what caused it.
- Send your instructor an email explaining your findings.
- Trust that any error in grading will be corrected quickly
What if I cannot get my work submitted on time?
- If you have an emergency that will cause your work to be late, please contact your instructor in advance of the due date so that arrangements can be made. Your instructor may reserve the right to deduct points for work turned in late based on the reason and the timeliness of notice.
- If a technical problem prevents you from meeting the scheduled due date, please contact the Help Desk at 1-800-594-2402 and immediately email your instructor about the situation.
What should I do if I have a disability that requires accommodation?
We are committed to providing reasonable accommodations for eligible students with documented disabilities as defined by state and federal laws relating to the Americans with Disabilities Act (ADA). Our intent is to ensure that every student who makes a request for accommodations under ADA is advised of the accommodation process as promptly as possible. If you are a student with a verifiable documented disability, and you can provide medical documentation regarding this disability, then contact Student Services for more information on how to receive ADA accommodations in your online classes.
How can I get extra credit?
Extra credit is not an option.