He discusses the relationship between home construction and GDP, housing’s wealth effect, and the availability of credit; and concludes with a balanced assessment of what may lie ahead for both the U.S. and global economies. He cites indicators that point to recovery, but tempers those with a discussion of the downside risks that remain.

There are enough stats and charts here to satisfy number crunchers like me, but the prose is clear and readable enough to stand on its own.

I think this is material that anyone in real estate, construction or mortgage finance should read, so we have posted it on our “Learn” page.

You can find these clips on the Learn page at realdata.com. Be sure to come back often to catch new clips as they become available.

If you would like to discuss having Frank address or teach a seminar to your group, contact him directly via email at seminar.realdata at gmail.com.

Something I often hear is, “Oh, I’m a residential agent so I guess that’s not for me.” Of course I have just the opposite in mind. The residential agent or broker is the ideal candidate for these classes. 

To explain why, I’d like to share a few observations I make to my students before I get into the meat and potatoes of my classes’ subject matter: What are these courses about? Why do I teach them?  And, why should you even care?

What are the courses about?

In the first class, I talk about how an investment property differs from a single-family personal residence. In particular, I discuss how the approach to value is different. I review some of the specialized vocabulary of investing and I talk about how you go about projecting your cash flow. I focus a good deal on a topic that almost everyone should understand better than they do: the time value of money.

In my intermediate class I cover financing and underwriting for investment property. I also discuss how to use various rate of return metrics like present value and IRR to judge how well you’re doing (or not) and I spend some time actually analyzing a property to show how you might identify the good, the questionable, and the real deal-killers.

Why do I teach this?

I’ve been in the real estate software business for nearly 30 years and have dealt with a lot of investors and developers in that time.  Most, as you might expect, have been quite knowledgeable, including many that I would describe either as seasoned veterans or remarkably astute beginners.

But then there are the other folks. They are the ones who have charged ahead boldly, sometimes armed with millions of dollars of other people’s money (i.e., money from partners, not just banks) and entirely unencumbered by much understanding of the financial dynamics of the deal they’re trying to put together. It has been my encounters with such would-be investors that launched me on my mission to attempt to promote financial literacy, in particular among real estate investors. I began that mission innocently enough by writing some articles, then a few books; then on to teaching real estate finance at Columbia and now to continuing ed in Connecticut.

Why do you care? 

Back to my original thesis: You are a residential agent or broker and I’m urging you to learn just a little about cash flows and cap rates and rates of return.  Why? I think there are at least two good reasons: one professional, the other personal.

In a previous life (think early Carter administration), I was both a residential and commercial sales manager. I lived right on the DMZ that separates those two specialties. In general, specialization is a good thing  –  I don’t recommend visiting your dentist for by-pass surgery — but in real estate brokerage it can lead to a kind of entrenched sales-prevention mindset.

Most if not all investors live in houses or condos of some sort, so sooner or later almost every investor will do business with a residential agent. If you are that agent and you understand the financial basics of investing, you can accomplish several worthwhile objectives.

 * You can burnish your personal credibility as a real estate professional; you understand not just your residential client/propspect’s lifestyle goals but also his or her business goals.  That becomes clear when you discuss both residential and investment  real estate intelligently.

 * If that person ypu encounter is also a propect for a commercial listing or sale, you can refer the prospect to the appropriate commercial specialist without your having to drop off the radar.  You are knowledgable enough to deserve at least a seat at the table, and you can keep on eye open to be sure your referral is being handled well.

Finally, on the personal level, why shouldn’t you participate in real estate investing?  Property is your business. You already know a great deal about neighborhoods, local employment trends, sources of financing from your residential activity.  Add to that an understanding of how to parse the data from potential rental property investments and you’ve written the resume of a successful investor.

To get the details about my upcoming classes — dates and times, locations –  and to enroll, go to our website at http://www.realdata.com/ce

We interviewed George Blackburne of C-loans to ask him what investors should be doing in today’s market to secure that commercial loan, and he had what we thought were a few surprising answers.

You can find the article by going to the “Learn” page of our website.

We would to hear from you on this subject, so tell us about what you’re encountering as you try to find financing in the current market.

What Every Real Estate Investor Needs to Know About Cash Flow… was released by McGraw-Hill six years ago, and in a second edition last fall.  It covers what I believe are the key concepts and calculations that every real estate investor ought to understand when making a decision to buy or sell.

I tried to make the book accessible and useful to beginners, students, and experienced investors alike.  It works well for me when I teach my continuing ed classes and my grad-school course in real estate finance at Columbia.  I hope it has been or can be helpful to you as well.

Many thanks to Realtor® Mag for the plug!

Frank Gallinelli

P.S. Speaking of plugs, I have a sequel: Mastering Real Estate Investment

We designed REIA Express with several audiences in mind. Perhaps you are…

– a broker who needs to create presentations for potential sellers or buyers;

– an investor who deals with residential or small- to medium-sized commercial properties;

– a person who is new to real estate investing, or a student in the fields of real estate development or finance;

– someone whose specialty is to buy, rehab, and then re-sell property for a profit.

If any of these describe your situation, then the Express Edition of REIA may be just the ticket for you. It has new capabilities and features, and offers presentations that can be customized with your company logo and property pictures. Get more info on the Express product page.

- Applies to U.S. and Canada addresses only.
- Total of items ordered must be greater than $50.
- Does not apply to calculator and e-course.
- Regular fees apply to other shipping methods (i.e., Fedex, Priority Mail)..

My thanks to them also for plugging my latest book, “Mastering Real Estate Investment.”

So — if you’re developing an apartment building, shopping center or other commercial property from the ground up — or if you’re renovating or expanding an existing property — take a look at this new version and check out its new features. It can help you plan your project, evaluate its feasibility, solicit partners, and make your case for financing.

You can get all the details here.