RE4104 Real Estate Finance and Investment Syllabus:
RE4104 Real Estate Finance and Investment Syllabus – Anna University PG Syllabus Regulation 2021
OBJECTIVES
To introduce the principles of investment relating to real estate including the basic principles underlying the appraisal of investments
To enable understanding of the influences of international modes of decision making.
To enable understanding of risks in real estate as a tool in mortgaging and investment performance.
To facilitate acquiring of basic skills and intuition needed to evaluate a variety of real estate project costs & investments.
To enable understanding of the various aspects of financial planning and analysis and its impact on real estate investment.
UNIT I FUNDAMENTAL CONCEPTS
Principles, Analytical methods and tools useful for making investment and financial decisions regarding real estate properties (Commercial, Industrial, Residential), Real estate Investment Concept of Time Value of Money, PV (Present Value), FV (Future Value), discounting FV to PV by Discounting Rate. Investment Decision making using financial tools like, Pay-Back -Period, Rate of Return (%) and IRR. and Bench Marking.
UNIT II CONVENTIONAL AND NON-CONVENTIONAL FINANCE
Real estate financial decision making (pension funds, banks, life insurance companies, investment trusts, joint venture, FDI) Crowd Funding, and Joint Development debt financing by Housing Finance Companies, Govt. Financial Policies (State &Central)-Impact on Real Estate
UNIT III RISK ANALYSIS AND SECURITIZATION
Various risk in real estate investments and its analysis, Primary and Secondary Markets, Concept of securitization and structured financing in India, including mortgage contract
UNIT IV FINANCIAL TOOLS
Real Estate Project Cost estimates, preparing and analysis of Project Matrix of Time-Activity Table, Project Cash flow statement, Debt Service Coverage Ratio, Debt-Equity Ratio, Sensitivity Analysis relating to the sensitivity of Market Demand and supply and understanding Project appraisal and of Project Financial viability. Techniques of Financial Appraisal.
UNIT V CASE STUDIES OF FINANCING OF PROJECTS
Financial Viability, Cost of Capital Operational cost, Financial Planning and Analysis, Estimating Various Cost, Direct and in-direct Cost. Fixed cost, Variable cost, BEP (Break Even Point, Concept of profit and Differential pricing of units, Cross subsidies, Income tax concessions or Tax holidays, Different business Entities and understanding the fundamentals of Income/Expenditure Statement, Balance Sheets, Ratio Analysis, Capital and Reserves, The role of Rating Agencies and Long term and short term market borrowings with fixed and variable Interest rate
TOTAL: 45 PERIODS
OUTCOMES
Ability to undertake feasibility and viability appraisals of real estate investments.
Ability to practice the principles, analytical methods and tools are useful for making investment and finance decisions.
Knowledge on development of real estate securitization and structured financing including mortgage contract helps to calculate the various durations to evaluate risk sharing in Real Estate Development
Awareness of real estate financial modelling, capable of analysing real estate markets and adept at assessing risk.
Sophisticated and agile understanding of the financial tools in real estate investing landscape
REFERENCES
1. David Falk; “The fundamentals of Real estate finance”, (2005). USA
2. Ira Nachem, “The complete guide to “Financing real estate development” 2007- Mc Graw hill companies, USA.
3. Nathan. S. Collier, “Construction finding – the process of RE development, Appraisal & finance (2007); John Wiley & Sons Inc; New Jersey.
4. Terrence M Clauritie, “Real estate finance: Theory & practice”, (2005), Prentice Hall, U.S.A
5. GE Greer, “Investment analysis for R E decision”, (2003), Dearborn R E education.
6. Gaurav Jain, “Real Estate Investment & Financial Analysis: The Four Essentials of Building Wealth with Realty” (2017)
7. Prasanth Das and Divyansh Sarma “Real Estate Finance in India”, (2013)
8. Roger Staiger, “Foundations of Real Estate Financial Modelling”- (2018) Routledge; 2nd edition (2018)
9. “Urban Infrastructure Finance and Management”- by K.Wellman (author), M.Spiller WileyBlackwell; 1st edition (2012)