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Real Estate

by: Shilling,James D.

Real Estate

by: Shilling,James D.

ISBN 13:
9780324143799
ISBN 10:
0324143796
Edition: 13th
Format: Hardcover
Copyright: 06/05/2001
Publisher: Oncourse Learning

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Summary

This book is written and designed for anyone seeking a clear understanding of the many decisions involved in real estate. The intent is to create a mind set that will make it easier for the reader to understand the world of real estate, and how change and real estate values interact. The material is in four major parts covering important components of the decision-making process: value analysis; market dynamics and property development; finance; and law and brokerage. This edition makes Real Estate the longest continuously published book in real estate.

Preface	p. xxv
Acknowledgments	p. xxvii
Value Analysis	p. 1
Introduction	p. 1
Real Estate and the Economy	p. 2
Real Property Characteristics	p. 8
Topics Covered in This Book	p. 14
Summary	p. 14
Glossary	p. 15
Questions for Review and Discussion	p. 16
Investment Environment	p. 17
The Decision-Making Cycle	p. 18
Market Participants	p. 19
Determinants of Real Estate Investment Spending	p. 22
Micro Demand for Real Estate	p. 25
Summary	p. 26
Glossary	p. 26
Questions for Review and Discussion	p. 27
Problems	p. 27
Basic Valuation Concepts	p. 29
Measuring Cash Return on Investment	p. 30
Analyzing Cash Returns	p. 34
Measuring Cash Proceeds Due On Sale	p. 36
Price Appreciation and Efficient Real Estate Markets: A Digression	p. 37
Present Worth or Discounted Value	p. 39
Future Property Values	p. 45
Summary	p. 46
Glossary	p. 47
Questions for Review and Discussion	p. 48
Problems	p. 49
Risk and Return in Real Estate	p. 51
Nature of the Problem	p. 52
Specific Types of Risks	p. 53
How Risk Affects Individual Properties	p. 54
How Risky Is Real Estate?	p. 57
Relationship Between Risk and Return	p. 62
How Diversification Can Reduce Real Estate Risk	p. 64
Summary	p. 75
Glossary	p. 75
Questions for Review and Discussion	p. 76
Problems	p. 77
Federal Taxes Affecting Real Estate	p. 79
Tax Basics	p. 80
Acquisition Phase	p. 90
Administrative/Operations Phase	p. 92
Summary	p. 101
Glossary	p. 101
Questions for Review and Discussion	p. 103
Problems	p. 103
Mechanics of Fixed-Rate Mortgage Financing	p. 105
Loan Terminology and Basic Financial Concepts	p. 106
Calculating Debt-Service Payments	p. 108
Compounding or Discounting More Than Once a Year	p. 109
Outstanding Loan Balance	p. 110
Interest Calculations	p. 110
Loan Amortization Schedule	p. 114
Points and Fees	p. 115
Borrowing Costs and Mortgage Choice	p. 117
Summary	p. 118
Glossary	p. 119
Questions for Review and Discussion	p. 119
Problems	p. 120
Investment Analysis	p. 123
Why Invest in Real Estate?	p. 125
Rational Investor Versus Economic-Being Assumption	p. 126
How Do Different Property Types Stack Up?	p. 127
How Specific Investments Are Analyzed	p. 135
Net Present Value Analysis for Douglas Manor Apartments--An Example	p. 135
Process Used To Determine After-Tax Cash Flow and After-Tax Equity Reversion	p. 137
Net Present Value	p. 139
Internal Rate of Return	p. 140
Negotiation and Rate of Return	p. 141
A Caution About Being Too Optimistic	p. 142
A Caution About Relying Too Heavily on Internal Rate of Return Analysis	p. 142
Summary	p. 146
Glossary	p. 147
Questions for Review and Discussion	p. 147
Problems	p. 148
Administrative and Property Management Issues	p. 151
Management Considerations	p. 152
Management Requirements by Property Type	p. 163
Property Tax Appeal	p. 166
Hazard Insurance	p. 168
Summary	p. 172
Glossary	p. 172
Questions for Review and Discussion	p. 173
Problems	p. 173
Disposition or Alienation Decisions	p. 175
A Look at Ordinary Disposition Decisions	p. 176
Other Disinvestment Strategies	p. 181
Dealing with Distressed Properties	p. 186
Summary	p. 191
Glossary	p. 192
Questions for Review and Discussion	p. 192
Problems	p. 193
Appraisal	p. 195
Overview of the Appraisal Process	p. 195
The Need for Market Value Estimates	p. 196
The Nature of Value	p. 198
The Appraisal Process	p. 200
Making a Survey and Plan	p. 202
Principles of Appraising	p. 203
Organizing and Performing an Appraisal of a Regional Shopping Center--An Example	p. 205
Summary	p. 207
Glossary	p. 208
Questions for Review and Discussion	p. 208
Problems	p. 209
Income-Property Analysis and Appraisal	p. 211
How Income Properties Are Valued	p. 212
Relationship Between Discount Rates and Capitalization Rates	p. 214
Deriving the Capitalization Rate	p. 215
Limitations of Direct Capitalization	p. 218
Gross Income Multiplier Technique	p. 218
Limitations of the GIM Technique	p. 219
Summary	p. 219
Glossary	p. 220
Questions for Review and Discussion	p. 221
Problems	p. 221
Appraising for Single-Family Properties	p. 223
Direct Sales-Comparison Approach	p. 224
Cost Approach to Value	p. 230
Reconciliation	p. 233
Summary	p. 233
Glossary	p. 233
Questions for Review and Discussion	p. 234
Problems	p. 234
Advanced Appraisal Topics	p. 237
The Concept of Highest-and-Best Use	p. 238
Valuing Leasehold Interests	p. 243
Summary	p. 245
Glossary	p. 246
Questions for Review and Discussion	p. 246
Problems	p. 246
Property Development	p. 249
Property Development Process	p. 249
History and Economics of Property Development	p. 250
Stages of the Development Process	p. 253
Role of the Lender	p. 255
Development Policy Issues	p. 257
Summary	p. 262
Glossary	p. 262
Questions for Review and Discussion	p. 263
Analysis for Property Development	p. 265
Site Selection and Analysis	p. 266
Improvement Analysis	p. 269
Analysis for Property Development	p. 269
Risk Analysis	p. 275
Summary	p. 277
Glossary	p. 277
Questions for Review and Discussion	p. 278
Problems	p. 278
Land Development	p. 281
The Land Development Process	p. 282
Site Analysis	p. 283
Locational Obsolescence	p. 286
A Site-Evaluation Checklist	p. 287
What Is Plottage Value?	p. 289
Land Development Financing	p. 289
Summary	p. 292
Glossary	p. 293
Questions for Review and Discussion	p. 293
Problems	p. 294
Advanced Property Development Issues	p. 295
Intensity-of-Use--The Case of an Office Building	p. 296
The Building-Envelope Calculation	p. 297
Analysis for Redevelopment or Modernization	p. 303
Redevelopment Versus Renovation	p. 305
Inherent Risks in Renovating a Property	p. 306
Summary	p. 307
Glossary	p. 308
Questions for Review and Discussion	p. 308
Problems	p. 308
Spatial Economics	p. 311
Spatial Economics and Urban Area Structure	p. 311
Urban Area Structure	p. 312
Why Do Urban Areas Grow?	p. 316
Rent Theory and Urban Structure	p. 320
Example: The Trade-Off Between Land Rent and Distance to the City	p. 325
Summary	p. 326
Glossary	p. 327
Questions for Review and Discussion	p. 328
Problems	p. 329
More About Urban Area Structure and Real Estate Markets	p. 331
Types of Real Estate Markets	p. 332
Market Characteristics	p. 333
Factors of Supply and Demand	p. 334
Real Estate Market Functions	p. 336
Real Estate Market Operations	p. 338
Local Real Estate Market Indicators	p. 342
Summary	p. 345
Glossary	p. 345
Questions for Review and Discussion	p. 346
Real Estate Market and Feasibility Analysis	p. 347
The Study Framework	p. 348
Estimating Potential Market Demand for Retail Uses--An Example	p. 349
Estimating Market Demand for Office Uses--A More Difficult Example	p. 351
Projecting Population for Milwaukee County--A Third Example	p. 357
Feasibility Analysis	p. 358
Summary	p. 359
Glossary	p. 360
Questions for Review and Discussion	p. 360
Problems	p. 361
Real Estate Finance	p. 365
Debt and Equity Financing of Real Estate	p. 365
Equity Financing	p. 366
Debt Financing	p. 370
Land-Contract Financing	p. 380
Financial Leverage	p. 382
Measuring the Impact of Financial Leverage on the Internal Rate of Return	p. 384
Summary	p. 388
Glossary	p. 388
Questions for Review and Discussion	p. 388
Problems	p. 389
Real Estate Investment Trusts	p. 391
How REITs Operate	p. 393
REIT Dividend Income	p. 396
How REITs are Valued	p. 396
Understanding Umbrella Partnership REITs	p. 403
Down-REIT Structures	p. 405
Paper Shares and Paper Clips	p. 406
Wholly-Owned Subsidiaries	p. 407
Factors that Influence REIT Value	p. 409
Real Estate Operating Companies	p. 412
Summary	p. 415
Glossary	p. 416
Questions for Review and Discussion	p. 417
Problems	p. 418
Financing Homeownership	p. 421
Determining Housing Affordability	p. 422
Federal Tax Laws and Homeownership	p. 424
Rent or Buy?	p. 427
How Houses Are Financed	p. 432
Housing Affordability and Loan Repayment Plans	p. 433
Summary	p. 442
Glossary	p. 443
Questions for Review and Discussion	p. 443
Problems	p. 444
Mortgage Underwriting	p. 447
Applying for a Loan	p. 448
Loan Documents	p. 449
The Debt-Financing Process	p. 455
Provisions of Mortgages and Trust Deeds	p. 458
Lender Risks	p. 465
Lender Procedures and Commitments	p. 467
Federal Laws Affecting Lending	p. 468
Summary	p. 469
Glossary	p. 470
Questions for Review and Discussion	p. 471
Problems	p. 472
Mortgage Securitization	p. 473
Secondary Lenders	p. 474
Mortgage-Backed Securities	p. 478
Collateralized Mortgage Obligations	p. 488
Securitization of Commercial Mortgages	p. 490
Summary	p. 494
Glossary	p. 494
Questions for Review and Discussion	p. 495
Problems	p. 495
Law and Brokerage	p. 497
Property Descriptions and Public Records	p. 497
What Is Real Property?	p. 498
Legal Descriptions of Real Property	p. 501
Public Records	p. 510
Summary	p. 512
Glossary	p. 513
Questions for Review and Discussion	p. 514
Problems	p. 515
Real Property Rights and Interests	p. 517
Freehold Ownership Interests	p. 519
Owning Real Estate by Business Organizations	p. 526
Encumbrances to Ownership	p. 528
Summary	p. 533
Glossary	p. 533
Questions for Review and Discussion	p. 535
Problems	p. 535
Leasing and Lease Analysis	p. 537
Creating a Valid Lease	p. 538
Typical Lease Clauses	p. 542
Termination of Leases	p. 546
Tenant Unions	p. 547
Summary	p. 548
Glossary	p. 548
Questions for Review and Discussion	p. 549
Problems	p. 550
Governmental Limitations to Ownership	p. 551
Police Power	p. 552
Eminent Domain	p. 561
Taxation and Special Assessments	p. 562
Summary	p. 564
Glossary	p. 564
Questions for Review and Discussion	p. 566
Problems	p. 566
The Investor-Broker Relationship	p. 567
The Law of Agency	p. 568
Listing Agreements	p. 570
Critical Issues in the Listing Arrangement	p. 574
Selecting a Broker	p. 577
Summary	p. 579
Glossary	p. 579
Questions for Review and Discussion	p. 580
Problems	p. 580
Brokerage Operations and Practices	p. 581
The Brokerage Function	p. 582
The Listing Process	p. 584
Selling the Listed Property	p. 588
Advertising Real Estate	p. 590
Brokerage Trends	p. 592
Summary	p. 593
Glossary	p. 593
Questions for Review and Discussion	p. 593
Contracts for the Purchase and Sale of Real Estate	p. 595
Essentials of a Valid Real Estate Contract	p. 596
Types of Sales Contracts	p. 599
Components of an Earnest Money Contract	p. 601
Remedies for Nonperformance	p. 607
Escrow Arrangements	p. 608
Summary	p. 610
Glossary	p. 610
Questions for Review and Discussion	p. 611
Problems	p. 611
Title Assurances and Title Transfer	p. 613
Methods of Transferring Title	p. 615
Title Evidence	p. 618
Deeds	p. 621
Essentials of a Valid Deed	p. 626
Summary	p. 629
Glossary	p. 629
Questions for Review and Discussion	p. 630
Problems	p. 631
Title Closing	p. 633
Preliminaries for Closing	p. 634
Elements of Closing Costs	p. 637
Closing-Statement Entries and Prorations	p. 640
Escrow Closing	p. 644
Title Conveyance	p. 646
Real Estate Settlement Procedures Act (RESPA)	p. 646
Summary	p. 650
Glossary	p. 650
Questions for Review and Discussion	p. 650
Problems	p. 651
Time Value of Money	p. 653
Compounding or Future Value	p. 653
Discounting or Present Value	p. 654
Time Value of Money Factors	p. 656
Principal Recovery Factor	p. 657
Time Value of Money Tables	p. 658
Index	p. 689
Table of Contents provided by Syndetics. All Rights Reserved.

Amazon no longer offers textbook rentals. We do!

Real Estate

Real Estate

9780324143799

0324143796

Summary

Table of Contents

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