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luckystar

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Hi people, i just got a job in a real estate investment co. Does any one know where to obtain books,site etc on financial modelling and feasibility reports specific for Real estate investment, will appreciate your help
 
What kind of real estate investment? Commercial real estate (office, retail, etc..), or residential multifamily, etc...

Check out some of the stuff on the ULI (urban land institute).

http://www.uli.org

This book is good if you want to get an academic understanding of real estate analysis and investment (financial economics approach):

http://www.amazon.com/Commercial-Real-Estate-Analysis-Investments/dp/0324136765

Also, what country? USA, UK, other?

The best way to learn, initially and if you have a background in finance, is to have a look at other people's models, learn from your team mates and read appriasals prepared for deals that your firm has invested in/lent to. Further courses and books will help you once you have a basic understanding.

Also, check if you have a copy of the official handbook used by appraisors (RICS - Royal Institute of Chartered Surveyors handbook "the red book, or in the USA the Appraisal Insititute).

If you don't have a decent background in finance, I would suggest learning more about finance as well.

Other books:
This is good if you are interested in a capital market's approach (this is a UK book):

http://www.amazon.com/Estate-Investment-Capital-Market-Approach/dp/0130200638/sr=8-1/qid=1160674272/ref=sr_1_1/002-7987725-9343253?ie=UTF8&s=books
 
imp,

You mentioned multifamily, so maybe you know where I can find some info that I'm seeking. Right now I work for a property management firm which manages a portfolio of low-rise apartment communities. I've passed the first two CFA exams, and would like to use the combination of the exams with work experience in order to transfer into either acquisitions or portfolio management. Do you know where I'd be able to find spreadsheets or similarly detailed information showing how investments are valued?

BTW, I saw that "Commercial Real Estate Analysis and Investments" was highly recommended by Amazon customers. How relevant is this to multifamily?

Much thanks,
Arnon
 
Arnon,

I don't have a source for spreadsheets or the like for multifamily. Most of the spreadsheets/models that I've seen were prepared by my colleagues or investment brokers (only property level), but I haven't seen any for multifamily. I assume that it would be the same some of the assumptions would be different.

I forgot to mention, make sure that you check out Argus. It is the industry standard (espicially in the US) software for valuation (at the property level). Don't buy it ($4,000K!). See if your firm has it, or if there is a stunt version (at a university you have access to)/ trial version that you can get your hands on. I don't think that it makes sense for you to spend money on this, but you should try argus if you have access to it.

http://www.argussoftware.com/

With two levels of CFA behind you, you should be fine. I would recommend trying to get into acquisitions/finance/development, etc as soon as possible. The market for these kind of jobs should be pretty good right now and if you have the RE background and finance knowldege all you really need is to start doing it. Also, don't restrict yourself to multifamily (unless you have a reason) and keep your options open.

The Geltner and Miller book that I mentioned will help you apply your CFA knowledge to real estate. It isn't a book that will teach you a specific sector, but it will give you a view of real estate from a finance perspective (the book discusses mortgages and debt instruments, equity investment, wacc, capm, REITs, capital markets, from the perspective of real estate etc...). It will give you an good idea of the analytics of valueing real estate (which you also have from your CFA studies - real estate is just another asset with cash flows).

Try to build some simple models in excel using accounts similar to the properties that you are managing, i.e. start with an income statement and balance sheet and try to build a model to forecast cash flows and then discount it back. Then, maybe try to add a layer of debt and see what your equity returns are like. This is one way which these investments are valued in practice.

I hope that his helps.

imp
 
Imp, has offered a lot of good advice.

I help manage a number of real estate funds - decide business strategy for the funds, work closely with our real estate brokers, what real estate to keep based on performance, market the funds to investors, decide on type and level of gearing, run a lot of analysis of the fund portfolios using KEL (but also use Argus), write investor reports and a bit of modelling.

Real Estate fund management in my opinion is one of the best areas to be in and offers some of the best salaries in the business.

Most of our models are designed in house and based on a very specific investment philosophy - I would learn from the teams what they place most emphasise on besides IRR!

I would suggest looking at the text books found on any of the following top ranked masters in real estate investment degrees (depending on where you are) -

USA
NYU - MSc Real Estate Investment
MIT - MSc Real Estate Investment
Wisconsin

UK
Reading business School - MSc Real Estate Investment and Finance
Cambridge - Real Estate Finance

�100 million before I'm 35!
 
Thanks, Lion. I'll have to look up the text books used by those schools, and I'm especially intrigued to learn how the pros define investment success.

BTW, I'm way past 35, and don't have anywhere near $100 million (in my currency), but I HAVE learned an awful lot. As a matter of fact, I've learned so much that I might just reach that target one day!
 
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