Investment Analysis Skills a Must in Today’s Residential Market
Today’s guest blog post is from Joseph A. Fisher, CCIM from Indianapolis, IN
The pricing and availability of single-family homes in today’s market has attracted a new crop of buyers – investors. These investors are looking at homes, condominiums and duplexes from a different perspective than traditional buyers; they are interested in loan-to-value ratio, rate of return and, ultimately, cash flows.
The skill set required to calculate and analyze investment measures can typically be found among commercial brokers.
Recognizing this, the CCIM Institute now offers 1-day workshop – Residential Real Estate Financial Analysis – designed for residential agents who want to attract new business. The course will be offered Nov. 10th at the REALTORS(R) Conference and Expo in Anaheim, CA.
Through interactive use of custom Excel spreadsheets, this hands-on workshop walks agents through time value of money (TVM) concepts and the measures of investment performance regularly used to analyze investment properties. The course also displays the impact of leverage on an investment, and concludes with a case study involving a couple looking to purchase a single-family home as a rental property.
Using this case study, agents are able to display the projected revenues and expenses for the investment property, and provide clients with a detailed financial pro forma so that the clients can make an informed decision on whether to move forward with the purchase.
“This class was by far the most useful and best class I’ve ever taken,” says Steve Ehlinger with NAI Latter & Blum Inc., who attended the class in January 2011. “I have read at least a dozen books on investment property and own several properties personally. Every book recommends using the same formulas to determine IRR, NPV, cap rates, etc. I have always wanted to somehow put them on a spreadsheet to simplify the process but could never figure out a way to do it and simplify it. [The Excel spreadsheets are] an invaluable tool to use to help clients make a sound financial decision with their purchases.”
The workshop also serves as an introduction to the commercial side of the real estate business for residential agents who are considering moving into the commercial arena, and an opportunity for new commercial agents to enhance their basic financial analysis skills.
Private investors who want to learn basic financial analysis skills to apply to their investment portfolio as well as future acquisitions can also benefit from this course.
I look forward to seeing you Nov. 10. Learn more and registration information>