RES-3200 F2016 2 - Syllabus PDF

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Instructor: Professor Albert Zevelev Ph.D. Office: Room C-409 (fourth floor), 137 E 22nd St Office Hours: Mon, Wed, 3:45 pm - 5:00 pm Email: [email protected]

Property Investment and Finance: RES 3200 Fall 2016 (preliminary syllabus) 1

Overview and Objectives

This course offers students a thorough orientation in the fields of real estate investment and finance. It covers the basics of the real estate investment analysis, mortgage concepts, and the financing of residential and commercial properties. The topics include an overview of the major types of valuation models and approaches that are used for analyzing the chief categories of real properties. Alternative types of mortgages will be discussed. The course emphasizes and clarifies the many ways in which financing and investments in real assets are similar to –and yet different from–financial assets. Learning Objectives and Goals 1. Real Estate Institutions and Legal Concepts 2. Mortgage calculations (payments, balances) for different types of loans 3. Underwriting 4. Buy vs Lease decision 5. Commercial Real Estate Investment: Pro Forma, Cap rates, Leverage, Development 6. Secondary Markets: REITs and MBS 1

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Prerequisites and course materials

Satisfactory completion of FIN 3000 is a prerequisite for this course. In particular, a solid understanding of the basic tools of finance, particularly discounting cash flows, is essential. The primary text for the course is Real Estate Finance and Investments (14th or 15th edition), by Brueggeman and Fisher. The text can be purchased online. Slides, announcements and supplemental materials will be posted on the course website on Blackboard. Outside of lecture, this is the central location for all information concerning the course. It is expected that you will check the course page on Blackboard on a daily basis for updated information and announcements. In addition to the course materials listed below, you are required to have a financial calculator and to be familiar with the use of a spreadsheet package such as Excel. A good, and relatively inexpensive financial calculator is the Texas-Instruments BA II Plus. Graphing calculators are not allowed on exams. If you have any questions regarding lecture or the course in general, you are encouraged to stop by my office. My office hours are posted above. If you cannot visit me during these times, email me letting me know some days and times that work for you. Please use the subject “RES-3200” when emailing me.

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Administration and Grading

Your grades will be based on your performance on homework, projects, exams, and class participation. • Homework: There will be five homework assignments worth 4% each. • Projects: There will be two projects worth 5% each. • Exams: There will be three exams. The first two exams will take place in class and 2

each is worth 20% of your grade. The third exam is worth 30% of your grade. If you must miss an exam, notify me as soon as possible before the time of the exam by email. You will only be given a makeup if you have a legitimate, documented excuse. Anyone missing an exam without such notification will receive no credit for the exam and will not be given a make-up. ATTENDANCE and ETIQUETTE: Attendance of lectures is required. If you have more than four absences, you will be dropped from the course and receive a WU or WF grade. No food or electronic devices.

3.1

ACADEMIC INTEGRITY

The Department of Real Estate fully supports Baruch College’s policy on Academic Honesty, which states, in part:

“Academic dishonesty is unacceptable and will not be tolerated. Cheating, forgery, plagiarism and collusion in dishonest acts undermine the college’s educational mission and the students’ personal and intellectual growth. Baruch students are expected to bear individual responsibility for their work, to learn the rules and definitions that underlie the practice of academic integrity, and to uphold its ideals. Ignorance of the rules is not an acceptable excuse for disobeying them. Any student who attempts to compromise or devalue the academic process will be sanctioned.”

A report of suspected academic dishonesty will be sent to the Office of the Dean of Students. Sanctions in this class will range from an F on the assignment to a D in the course. Additional information and definitions can be found at http://www.baruch.cuny. edu/academic/academic_honesty.html.

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3.2

COUNSELING AND STUDENT HEALTH

Students may occasionally have personal issues that arise in the course of pursuing higher education that may interfere with academic performance. If you are facing problems affecting your coursework you are encouraged to speak with the Director of Executive Programs 646 312 3100 or to seek confidential assistance at the Baruch College Counseling Center (646)312-2158.

3.3

STUDENT WITH DISABILITIES

Students with disabilities may receive assistance and reasonable accommodations to enable them to participate fully and equally in courses at Baruch College. To establish the accommodations appropriate for each student, please alert your instructor to your needs and contact the Office of Services for Students with Disabilities. For more information contact Lillian Shmulevich, Assistant Director of this office in B2271 or at (646) 3124590.

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COURSE SCHEDULE

The following is a schedule of lecture topics, readings and exams. While representing the content of the course, there may be changes during the course of the semester depending on how fast or slow we cover the material. Class #

Date

Topics

Reading

1

8/29

Course Overview

2

8/31

REI: Legal Concepts, REF: Notes & Mortgages

9/5

NO CLASS (Labor Day)

3

9/7

Finance

Chap 3

4

9/12

Finance

Chap 3

5

9/14

Fixed Rate Mortgages

Chap 4

6

9/19

Fixed Rate Mortgages/Guest Speaker

7

9/21

Review

8

9/26

Exam 1

9

9/28

Adjustable Rate Mortgages

10/3

NO CLASS

10

10/5

Refinancing

Chap 6

11

10/6

Residential Underwriting

Chap 8

10/10

NO CLASS

10/12

NO CLASS

12

10/17

Residential RE: Buy or Lease

Chap 7

13

10/19

Residential RE: Buy or Lease

Chap 7

14

10/24

Speaker/overflow

15

10/26

Review

16

10/31

Exam 2

17

11/2

Francis Greenberger

18

11/7

Commercial RE

Chap 1, 2

Chap 5

Chap 9, 10, 11 5

19

11/9

Commercial RE: cap rates & property valuation

Chap 9, 10, 11

20

11/14

Leverage

Chap 12

21

11/16

Risk Analysis, Financing Corporate Real Estate

Chap 13-15

22

11/21

Financing Project Development, Financing Land Development

Chap 16-17

23

11/23

Organizational Forms, Secondary Mortgage Market: MPTS

Chap 18-19

24

11/28

The Secondary Mortgage Market: CMOs and Derivative Securities

Chap 20

25

11/30

Real Estate Investment Trusts (REITs)

Chap 21

26

12/5

Real Estate Investment Performance and Portfolio Considerations

Chap 22

27

12/7

Overflow day

28

12/12

Review

The final exam will be held at the time and date as scheduled by the registrar’s office.

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