Professional Documents
Culture Documents
REAL ESTATE
INVESTMENT
SYNDICATE 2
SYNDICATE
2
Rozean Wijaya
- 29115684
Raditya Dwi A
- 29115690
Randy
- 29115685
Nadya Rizkita
- 29115630
Wulan C. Lestari
- 29115628
Rais Kandar
- 29115663
M Iqbal F Syamlan
- 29115539
01
02
03
04
CONTENTS
01
TYPES
OF
REAL
ESTATE
- ROBERT KIYOSAKI-
TYPES OF
REAL ESTATE
RESIDENTIAL
COMMERCIAL
INDUSTRIAL
INFRASTRUCTURE
RESIDENTIAL
REAL ESTATE IS
FAMILIAR TO MOST
ADULTS BECAUSE AVERAGE
PEOPLE WILL OWN AT LEAST
ONE HOME OVER THE COURSE
OF THEIR LIFETIME
RESIDENTIAL
PRICE ELEMENTS
FOR RESIDENTIAL
- Quality and condition of the building
- Amenities
- Proximity to malls, schools, transportation
arteries
- Safety of the neighborhood
- Condition of the other properties in the
neighborhood
- The trendiness of the neighborhood
- Shortage or surplus of similar properties
- Mortgage rates
PROPERTIES
DESIGN TO HOUSE A
BUSINESS
- PRIMARILY : OFFICES & STORE
- BOUGHT WITH INVESTMENT MINDSET
- VALUED BASED UPON CAP RATES
COMMERCIAL
PRICE ELEMENTS
FOR COMMERCIAL
- Foot traffic in front of the location
- Proximity to major transportation arteries
- Quality of the other business nearby
- Condition and styling of the building
- Parking available
- Prestige level of building
- CONSISTS OF FACTORIES
& OT H E R ( O I L TA N K
FARMS)
INDUSTRIAL
02
REAL
ESTATE
PROFITABILITY
SOURCE OF
PROFITABILITIES
Property value
appreciation
Cash Flow
Paying down debts (debt
depreciation)
ANNUAL
PROFIT
Property Value
$100,000
Mortgage (25 years amortization)
$80,000
Equity
$ 20,000
ANNUAL
PROFIT
Cash Flow
Mortgage Amortization
Appreciation
$1,000
$2,000
$3,000
TOTAL
$6,000
NUMERIC
EXAMPLES
6%
30%
A regular warehouse
Cash Flow (/month)
$5,000
OR
MAXIMIZING
REAL
ESTATE
RETURN
$200
Total Cash Flow
$20,000
OPTIMIZING
PROPERTY USE
Renovation
Changing property functions
Selling or renting the
property off by spliting it to
smaller sections
03
REAL
ESTATE
VALUATION
VALUATION METHOD
REAL ESTATE
Comparables -> Comparing with other similar properties
Cap Rates -> a discount rate determined by market, used only to a
property which generate income. Use net operating income not cashflow.
DCF -> using discount rate for cashflow each year added by terminal
value at the end of asset lifetime. Also reflect the effect of debt etc. due it
being a cashflow.
Replacement cost -> estimating the cost rebuilding the property from
scratch which can yield a higher value than the market in cases of old
building. Usually used in insurance.
CAUSE OF
REAL ESTATE
VALUE
APPRECIATE
Renovations
A disappearance of a perceive
problem in the area
A major increase of real estate
price
Transition of an area
Property converted to a more
valuable function
Increase in overall housing
demand
A considerable speculative
investment in the area
Strong political encouragement
to growth
REAL ESTATE
VALUE
APPRECIATE
04
REAL
ESTATE
IRR & NPV
forecasted future
INFLOW
Revenue from operations (rents, deposits, vending, parking,
ad space, etc)
The sales of some teresterial units
Operating expenses (utilities, maintenance, insurance,
property, managers, etc)
Construction costs (consultant, plans, land, building, etc).
Marketing costs
Depreciation
Taxes
Partner (developer or joint venture) fees
OUTFLOW
IRR
Discounted with
investors target
minimum return
Positive NPV means
REAL ESTATE
NPV
investment exceeds
investors hurdle rate
EQUITY INVESTOR
AND DEVELOPER
Different for each project: depends on the manager
Common manager interest: net profit after tax and leverage (with
or without debt).
Equity investor contribute the majority of the funds
Developer doesnt or contribute small funds
Investor relies on the developer to make the project succeessful
that developer will be provided by incentives
CALCULATION
REAL ESTATE
Create pessimistic, most likely, and optimistic scenario
Create each scenarios IRR
Create incentive percentage level for each level of IRR for developer
Calculate the remaining cash for profit distribution for investor
Calculate the terminal value of project
Combine the terminal value and profit for investor, so that we get IRR of equity
partner
Terima
Kasih