Finance And Real Estate

[Lien Kocurek]

Whetheryou're looking to purchase a home or invest in commercial properties, understanding the basics of real estate finance is essential for success. An exciting, challenging line of business, real estate finance involves the analysis, planning and management of financial resources related to commercial and residential loans and properties. This post provides an overview of several key topics and concepts, from valuation methods to careers in real estate finance.

Real estate finance is a branch of finance that focuses on how people purchase real estate, whether that be a home, an office building or a plot of land.1 This area of finance involves the analysis, planning and management of financial resources related to real estate, commercial loans and properties. It also includes financial processes around real estate, such as acquisition, development, construction and operation of commercial and residential properties.

Commercial and residential properties are two main types of real estate. While both types of properties share some similarities, there are also significant differences between them that make them distinct from one another.

Commercial real estate refers to properties that are primarily used for business purposes.2 This includes office buildings, retail spaces, warehouses, industrial buildings and land zoned for commercial use. Commercial properties are often owned by businesses, or real estate agents, investors or developers who lease or rent the property to tenants.2

Commercial properties require a significant investment upfront, as they are often more expensive than residential properties. Commercial real estate investors and developers often need to borrow money or secure real estate financing to purchase or develop commercial properties.

Residential real estate refers to properties that are used for living purposes, such as single-family homes, apartments, condos and townhouses.5 Residential properties are typically owned by individuals or families who either live in the property or rent it out to tenants.

Residential properties are valued through three main types of valuation, including fair market value, appraised value and assessed value.6 Each valuation type is tied to a different function. For example, fair market value is used to price a home to prospective buyers. It looks at factors like location, size, amenities and the condition of the property in comparison to similar homes in the same area.5 The appraised value must be calculated by a licensed appraiser and is typically used for borrowing to purchase a home or when refinancing a home. The assessed value is determined by the local county tax assessor in order to collect the appropriate amount of property taxes.

Real estate finance professionals play an important role in helping both individuals and businesses obtain loans or other forms of real estate financing from banks, mortgage lenders or other financial institutions. To pursue a career in this field, a degree in finance, real estate or a related field is typically required, along with relevant experience and industry certifications.

A real estate analyst provides financial analysis for investment opportunities, evaluating the potential risks and returns of a project or property.8 They gather data and create financial models to help guide investment decisions based on market trends and economic conditions.

A real estate investment analyst prepares underwriting of properties using projections, market research and financial statements.10 Using this data, they assess risks in order to make recommendations to potential investors.

A real estate asset manager manages and maximizes the value of a portfolio of properties on behalf of an investor or company.14 They develop strategies to increase revenue and reduce costs, monitor performance and oversee property maintenance and improvements.

The Online MSF is designed for working professionals and features a comprehensive curriculum that will hone your competitive edge in many business areas, from corporate finance to financial planning and beyond.

Take a deeper dive in real estate with two courses focused on real estate finance and investment. In your real estate finance course, you will learn about a wide range of real estate topics, from understanding the home buying process to programming complex mortgages. In your course on real estate investments, you will improve your understanding of the real estate asset class.

Because of this, employers in the real estate industry highly value students who have applied knowledge of both finance and real estate. Opportunities for finance graduates in real estate are numerous, including property valuation, financial analysis of real estate prospects, real estate investment financing, and real estate purchase and leasing, to name just a few.

Requirements for Major: Please note that students need to declare a first major in Finance and Real Estate (FREL) and manually apply for the second major in Real Estate for Commercial Properties (RELC) to qualify for enrollment in all major-restricted courses. Real Estate for Commercial Properties (RELC) must be declared as the second major in order for students to fulfill Blackwood Department of Real Estate program requirements for this Double Major. Students in this Double Major must meet with an advisor from each major throughout matriculation to verify on-time completion of graduation requirements.

If your interests include mortgage lending, real estate development, asset management, appraisal or real estate management, consider this path to prepare for a career in the real estate industry.

You'll cultivate the skills to manage portfolios, perform risk analysis and study capital market trends as they relate to real estate principles, valuation, law and finance/ investment analysis. Learn to appraise and develop real estate and evaluate real estate investments. Plan, implement and analyze real estate finance instruments, including mortgage markets, credit analysis and real estate lending. Develop discounted cash flow models for potential real estate investments.

Our instructors are foremost experts on real estate markets and property valuation. They bring to the classroom a wealth of experience as both successful real estate professionals and professors. They rank highly for mentorship, academic experience and teaching quality. Their research and insights into real estate matters are featured in prestigious publications and media outlets.

Career opportunities include real estate portfolio manager, appraiser, brokerage and leasing, real estate developer, mortgage banker, insurance appraiser, property manager, real estate inspector, real estate analyst and more.

Exceed your own expectations. Incoming and current undergraduate students of every major may apply. Unique classes are offered in the John V. Roach Honors College, which connects students with a varied curriculum that is stimulating, supportive and cross-disciplinary.

Students pursuing the finance and real estate option through our program receive credit through the Appraiser Qualifications Board, AQB, which sets them up to become a licensed appraiser through the Texas Appraiser Licensing & Certification Board, TALCB. To learn about getting an appraisal license in Texas, visit talcb.texas.gov.

Students pursuing the finance and real estate option have a variety of opportunities available to them upon graduation. This option provides opportunities for students interested in pursuing careers in the either the banking or real estate industry tools for understanding issues unique to lending, real estate appraisal, real estate investment, development and brokerage.

Finance & Real Estate at VSB is a community of exceptional thought leaders with a reputation for high-quality research, curricular innovation, and nationally-recognized technological resources. Our faculty collaborate with academic colleagues, students, alumni, and corporate partners within VSB and across campus to ensure a dynamic and business-relevant learning environment. In particular, our Real Estate faculty work closely with the Daniel M. DiLella Center for Real Estate to develop exceptional academic and professional development opportunities for students pursuing a degree in real estate.

The Finance & Real Estate Department at VSB oversees three degree programs: a BBA with a major or minor in Finance; a major, co-major or minor in Real Estate, and a Master of Science in Finance. Additionally, undergraduate finance majors may pursue the Applied Quantitative Finance Concentration for additional coursework that prepares them to be more conversant on the modeling and complex analysis happening in finance today. Students in the Villanova MBA Program can also pursue concentrations in either finance or real estate.

VSB Finance faculty publish in journals including the Journal of Finance, Journal of Financial Economics, Review of Financial Studies, Journal of Financial and Quantitative Analysis, Management Science, Real Estate Economics, Journal of Corporate Finance, Journal of Financial Intermediation, Journal of Money Credit and Banking, Review of Finance, Journal of Banking and Finance, as well as other leading journals.

Investing in real estate is never a bad idea. It offers potential investors a slew of financial and personal benefits, such as increased cash flow, home appreciation, and tax benefits. In fact, real estate investment continues to be one of the most popular vehicles in producing financial wealth. According to the IRS, approximately 71 percent of Americans that declared more than a million dollars on their income tax returns in the last 50 years were in real estate. Ironically, beginner investors face the challenge of learning how to obtain real estate investment financing before they can start creating wealth. Read on to learn about some of the most common types of real estate financing options out there, as well as prominent loans for real estate investing.

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