REFM self-study modules provide students with an out-of-class resource to help them punch above their weight in Excel.

This module is for those with little or no prior exposure to Microsoft Excel. Topics covered include:

• What Excel is, and what versions are in use
• Launching Excel and saving a new file
• The spreadsheet grid and worksheets
• Basic formatting
• Basic interface navigation using the ribbon tabs
• Saving alternate file versions
• Printing

This module teaches the basics of operating in Excel, as well as advanced techniques, specifically as they relate to real estate analysis. All topics include exercises. Topics covered include:

• Arithmetic and Rounding
• Statistics
• Relative vs. Absolute Cell References
• Inserting and Deleting Rows and Columns
• Dates and Timelines
• Conditional Statements
• Function Wizard
• Creating Summary Tables
• Formatting Numbers
• Conditional Cell Formatting
• Data Table Lookup Functions
• Custom Formatting
• Format Painting
• Paste Special
• Transpose
• Financial Functions for Compounding and Discounting
• Internal Rate of Return (IRR)
• Mortgage Payment Calculation
• Formula Auditing
• Data Tables for Sensitivity Analysis
• Circular References
• Keyboard Shortcuts
• Best Practices

In this module, students will come to truly understand the nature of the IRR calculation and see why it reacts the way it does in the various acquisition and development cases that are presented in spreadsheet form. Topics covered include:

• Time value of money crash course: Present Value, Future Value and Net Present Value
• The nature of the IRR calculation, and how the IRR value changes during a transaction
• Equivalent Annual IRR rates for quarterly-, monthly-, and daily-based IRR calculations
• Why a monthly-based IRR is more accurate than an annual-based IRR
• Relationship between the IRR and the Equity Multiple
• What IRR tells us, and what it doesn’t tell us
• IRR for acquisitions and development examples

Excel functions taught include:

• PV – Present Value
• FV – Future Value
• NPV – Net Present Value
• IRR – Internal Rate of Return
• XNPV – NPV for non-periodic cash flows with known dates
• XIRR – IRR for non-periodic cash flows with known dates

In this module, students learn the answers to the following questions:

• • What is a capitalization (cap) rate?
  • What composes a cap rate?
  • Why do cap rates change?
  • How do you calculate a cap rate?
  • How do you select one when performing a property valuation?
  • What should you think when people quote cap rates verbally?
  • Where can I find cap rates for a certain property in a certain geography?

In this module, student learn the answers the question: how does a real estate developer know what to pay for a piece of developable land?

Students will learn the basics of real estate development residual land valuation for both income-producing assets and unit sales assets, as well as the principles of valuation through comparable sales (comps).

Topics covered include

Residual Land Valuation Basics:

• Allowable Building Density/FAR
• Ground-Floor Retail Square Footage
• Primary Building Use Gross and Net Square Footages
• Calculation of Building Parking Requirements
• Development Cost Excluding Land
• Sources of Funds For Development

Specific To Income-Producing Assets (Office/Industrial/Retail, or Apartments):

• Stabilized Net Operating Income From Primary Use and Parking
• Future Stabilized Yield On Cost
• Solving for Residual Land Value

Specific To Unit Sales Assets (Condominiums or Housing Subdivisions):

• Net Sales Proceeds From Housing Units, Parking & Storage
• Gross Valuation and Net Sales Proceeds of Retail Component
• Solving for Residual Land Value

In this module, students learn the foundations of real estate finance as well as advanced techniques and topics. Topics covered include:

• The Time Value of Money Model (includes Exercise #1)
• The Discounted Cash Flow Model (includes Exercise #2)
• Internal Rate of Return (IRR)
• Mortgage Payment Calculation
• Refinancing/Interest-Only Scenario Payment Calculation (includes Exercise #3)
• Refinancing Case Study
• Maximum Loan Amount Calculation (for income-producing property acquisition)
• Residual Land Valuation (includes Exercise #4)
• Future Net Operating Income Calculation
• Transaction Capital Structures
• Financing Development Transactions
• Multiple Equity Investors Discussion (includes Exercise #5)
• Profit Sharing Discussion
• Preferred Return, Internal Rate of Return Waterfall and Promote theory

The developer’s analysis is conducted assuming a mixed-use prototype with ground floor retail and income-producing parking for multi-family, office/industrial and condominiums/housing subdivisions. All topics contain exercises. Topics covered include:

• Site and building information
• Rentable/salable square footage allocations across uses
• Project timing elements
• Capital structure
• Uses and sources of funds
• Cash flows and returns

In this module, students learn advanced techniques and topics related to joint venture partnerships and investment waterfall modeling for single property transactions. Topics covered include:

• Rationale behind targeting disproportionate returns to the Sponsor
• How to achieve disproportionate returns through fees and partitioning of cash flows
• Preferred Return overview
• Preferred Return variations with respect to priority of payment
• Preferred Return in context (Payment Types A, B and C)
• Nature of Preferred Return (Non-compounded/compounded, non-cumulative/cumulative)
• Annual Preferred Return Exercise
• Monthly Preferred Return Exercise
• Waterfall Distribution overview, with Animation
• Promote Mechanism overview and modeling
• Look-Back Internal Rate of Return (IRR) Method
• 3-Tier Waterfall modeling
• Double-Promote, 5-Tier Waterfall modeling
• Double-Promote Exercise
• Alternate Compounding Periods: Monthly, Daily, Quarterly
• Sample Partnership Structures

In this module, students will learn big picture real estate private equity fund basics, the general legal structure of funds based in the U.S., how to set up a fund-level model, and considerations for running sensitivity analyses. A property-level partnership analysis is also addressed. Topics covered include:

• Capital sources
• Major types of funds
• General legal structure
• Rationale behind disproportionate reward to the General Partner/Fund Manager through a promote structure
• Modeling and then replicating a prototypical transaction starting at Net Operating Income and ending at Levered Cash Flow
• Weaving in and rolling up and modeling multiple transactions on the fund-level
• Considerations for running sensitivities
• Individual transaction typical partner joint venture structure and modeling