James R. DeLisle, Ph.D.
Real Estate Finance, Winter 2010
Syllabus for Real Estate Finance: URBDP 554
Professor:
James R. DeLisle, Ph.D.
jdelisle@u.washington.edu
Office: (206) 616-2090
Office Hours:
TR 1:30-2:30, or by appointment
Rm 410 G Gould Hall
Class:
Gould Hall: Rm 322
TTh 3:30-5:20
Periodic Friday Labs: to be announced as needed
Moodle Real Estate Finance 2010 Website
Additional Support: Marc Weigum
Marc.weigum@gmail.com
Overview: This course provides students with an overview of real estate finance and investment analysis.
The course is designed to lay a solid foundation that will allow students to calculate the financial
implications of various real estate decisions. Where appropriate, new trends and industry issues will be
incorporated including a discussion of affordable housing, mixed-use projects, and sustainable
development. This material covers such topics as basic time value of money, financial leverage,
discounted cash flow analysis of individual properties, capital flows, and institutional portfolio
management. The course also covers such items as: the implications of macroeconomic factors on real
estate; the structure and operation of the real estate capital markets; the major participants in the market;
and, the various financial structures and products that can be used to develop, manage and/or transact real
estate in a viable, financial feasible and sustainable manner.
Course Objectives: There are several main objectives for this course including:
• Fostering creative thinking, modeling and problem-solving related to real estate finance.
– Systematically think about financial decisions related to real estate
– Develop an ability to model a variety of financial decisions
• Developing an understanding of real estate fundamentals and finance including:
– Market fundamentals: products and processes
– Market Decision-making: players and market drivers
– Residential Finance & Income Property Finance
– Construction and Development Finance
• Cultivating an appreciation for the impact of capital markets including:
– Sources and Uses of Capital
– Capital Flows to Real Estate
– Private Market
– Public Market
• Developing individual and team-based problem solving skills
– Emerging Trends: class discussion of emerging issues and trends
– Financial modeling: team-based modeling and application of appropriate tools
• Excel Modeling
• Argus Decision-support
http://jrdelisle.com
James R. DeLisle, Ph.D.
Real Estate Finance, Winter 2010
Prerequisites: Students must have completed URBDP 552, Real Estate Process or obtain a waiver based
on prior training, skills, and a willingness to work on remedial materials to ensure they have the proper
foundation. I have placed a copy of the textbook for RE Process entitled 'Real Estate Principles: A Value
Approach' on reserve in the College of Built Environments library. Please skim through the book to get a
better understanding of some of the background materials. Along the same lines, please visit my website
http://jrdelisle.com and review the Cases & Tutorials for Real Estate Principles.
In terms of skill sets, students are expected to have a basic understanding of computers and the Internet, as
well a working knowledge of Excel (tutorials will be provided). Basic “mathematics of real estate” and
other investment tutorials and references will be made available as background and support materials and
are located in the Cases & Tutorials section of my personal website. Students may also be provided
additional materials or be asked to attend laboratories to ensure they have a proper foundation and the
tools necessary to succeed in the class.
Course Materials
Text. Clauretie & Sirmans, Real Estate Finance: Theory and Practice, 6th Edition, Irwin, (2010);
assignments in the syllabus are designated Ch. (for Chapter). The text includes an extensive list of on-line
resources that can be accessed at: Cengage Learning On-line. The Student Materials, to which this link
points, provides a number of useful resources.
Supplemental Material:
 Cases and Tutorials from Real Estate Process (see: http://jrdelisle.com890-=):
 “Time Value of Money & The Mathematics of Real Estate Finance,” (DeLisle)
 Cases (DeLisle)
 Case 1: Building Envelope
 Case 2: Total Replacement Cost
 Case 3: Frontdoor/Backdoor Analysis
 Case 4: Alternative Use Analysis
 Case 5: Discounted Cash Flow
 Problems in Real Estate Finance
 Problems in Real Estate Finance (hyperlinked files)
 Problem Set 1: Basic Time Value of Money
 Problem Set 2: Basic Mortgage Finance
 Problem Set 3: Intermediate Mortgage Finance
 Problem Set 4: Basic Corporate Real Estate Decisions
 Guides
 A Guide to Argus
 A Guide to Argus Portfolio
 Glossary: A proprietary JRDeLisle Glossary containing:
 Over 4,200 words searchable by phrase
 An alphabetic listing of terms in the glossary.

 Additional readings/tutorials will be assigned to supplement the textbook. Materials will be
available in electronic and/or hard copy formats; students should refer to WebCT for updated list
of assignments.
www.reuw.washington.edu
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James R. DeLisle, Ph.D.
Real Estate Finance, Winter 2010
Computer/Technology Requirements and Integration
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Excel: Over the past several years, the course has migrated toward more Excel instruction and
support to help students develop fundamental spreadsheet and advanced financial modeling skills.
While some of the calculations will use built-in functions, basic equations will be presented to
allow students to refine spreadsheets and conduct sensitivity and scenarios analyses.
Computer Skills and Access: students must have access to a computer and have a working
understanding of Excel. In addition, students should have access to PowerPoint or comparable
software for presentation of their final projects.
Internet & e-mail Access: students must have access to the Internet; high speed access will be
optimal for some applications; software requirements will be restricted to a current browser (i.e.,
Internet Explorer or Netscape), as well as Adobe Acrobat Reader which is available for free.
Moodle: The course will be managed and organized in part using my personal Moodle account to
provide a technology-enhanced learning experience. Students will be able to access course
materials and lectures through the Moodle interface using any Internet access point. Some
quizzes, discussion participation and other graded items will be managed via Moodle.
Argus: The textbook incorporates Argus, by reference and by example. Students have two options.
First, they can use remote access via the Citrix Server where updated versions of Argus 14 should
be available by mid-quarter. Second, they can purchase a license for version 14 for academic use
for $99. This latter option will allow installation on a laptop and provide access to a fully
functional version although there are some limitations. Details will be provided in class. Students
majoring in real estate or anticipating real estate careers are encouraged to obtain their personal
copies.
Course Administration
Method of Instruction: The course will consist of a combination of traditional classroom lectures and
technology-enhanced instruction. Technology enhancements will cover a number of media ranging from
supplemental streaming video/audio presentations to web-enabled administration and support via Moodle
(see: Computer/Technology Requirements and Integration above for access requirements). Classes will
include lecture, discussion, problem-solving and team formats. Internet-based discussion forums, selfassessment quizzes and other appropriate technological elements may be used to further enhance the
learning experience. Students will also participate in a research project as part of their grade. The bulk of
these research projects, which will be undertaken on a team basis, will be completed outside of class.
Readings, Preparation and Participation: The reading assignments, problems, cases and discussion
forums are an integral element of the course. Students are expected to complete readings and other
assigned work prior to the classes in order to follow and participate in the discussion. Learning is
approached as a participatory process, benefiting from student/teacher and student/student interaction.
The instructor will provide lecture notes and other learning materials on a periodic basis through his
personal website or the Moodle server. All testing will be processed through Moodle.
Quizzes/Examinations: There will be a series of short “deliverables” during the quarter –approximately
one per week—that will assess understanding of basic concepts, financial models and decision-making.
 Four (4) Multiple Choice/Matching Quizzes & calculated quizzes on various elements of real
estate finance
 Two (2) Mortgage Spreadsheet Modeling: fixed rate and variable rate mortgages
www.reuw.washington.edu
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James R. DeLisle, Ph.D.
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Real Estate Finance, Winter 2010
Two (2) DCF Modeling: Enhancement to Excel model with rent roll, partnerships and
portfolio integration
Two (2) Argus Cases. Students will develop an Argus Model for an individual project and a
portfolio project.
Final Exam/Paper. The final exam will be an individual project in which students explore a
contemporary issue in real estate finance drawing from a list of issues.
Make-up Exams/Project Extensions: Make-up exams are discouraged, although efforts will be made to
accommodate legitimate schedule conflicts. The use of Moodle as a testing vehicle should provide
sufficient spatial/temporal flexibility to avoid time conflicts. Prior notification of conflicts with
assignments or special needs is required. Extensions or accommodations must be approved in advance.
Attendance Policy: To provide a rich, rewarding, interactive learning environment, students are expected
to attend and actively participate in classes. A portion of the final grade will be based on class
participation and project presentations. Students are responsible for all materials covered in class or
assigned, regardless of actual attendance.
Grading: Final grades will be based on aggregate point totals for exams, quizzes and research projects.
Grades will be curved to provide a balance of intellectual challenge and academic reward. In particular,
the following grading system will be applied.
Quizzes
Financial Modeling: Mortgages
DCF Modeling
Argus/Portfolio Decision Support
Final Exam
Class Participation & Forum
24%
20%
20%
20%
10%
6%
Withdrawal Policy. Students desiring to withdraw from class or classes must follow the procedure appropriate for
the period of time in the quarter.
Academic Honesty/Code of Conduct: Students are expected to adhere to the code of conduct for the University of
Washington. Due to reliance on Moodle-based assessment, students are cautioned to ensure that their submissions
reflect their own work. Students are expected to adhere to the UW’s code of conduct. Students are advised to refer
to UW policies and procedures to ensure their safety and security on campus. For more information, go to:
http://www.washington.edu/safecampus/ To report threats, seek advice, or get counseling, dial 206-685-SAFE
(7233).
Timetable: Please note that additional readings, assignments and due dates will be posted in Moodle and
announced in class. The general calendar is as follows although it is anticipated that deviations may be necessary to
customize the learning experience to the demographics of the class. As noted, there will be a textbook and assigned
readings, most of which will be electronically available.
www.reuw.washington.edu
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James R. DeLisle, Ph.D.
Real Estate Finance, Winter 2010
Timetable as of 1/5/2010
Wk
Date
1
1/5
Course Overview
and Process Review
Ch 1: RE Finance
Overview
1/7
Capital Markets &
Real Estate
1/12
Financing Notes &
Mortgages
1/14
Residential
Mortgage Loans
Ch 2: Money, Credit
and Rates; Ch 3:
Finance Theory & RE
Ch 4: History of Res
Finance; Ch 5: Postwar
Residential Finance
Ch 6: Alternative
Mortgages
1/19
Residential Finance;
Housing
Affordability
Underwriting
Residential Property
2
3
1/21
4
1/26
1/28
5
2/2
2/4
6
2/09
2/11
Topic
Discounted Cash
Flow;
Investment Analysis
Introduction to
Income Property &
Leases
Valuation of Income
Property
Financial Leverage
& Alt. Financing
Risk Analysis
Disposition/Renovat
ion
Corporate RE
Chapter
Ch 7: Financing and
Property Value; Ch 8-9
Federal Housing
Ch 13: Loan Orig; Ch
14: Mortgage Ins, Title
Insurance
Ch 19: Perm Financing
To be assigned
Readings/Cases
DeLisle, No Bottom, No Net
Graaskamp, Finance Educ. &
Risk Management
2010 Emerging Trends;
DeLisle: RE Asset Class or
Sector?
DeLisle, Primer 1: Res.
Mortgage pgs 1-48.
Quizzes/Projects
Out
Review Cases: located in
Moodle Process Review
Prob Set1: Basic Time Value
of Money
Mortgage Project
1 Base Mtgs. Out;
Quiz 1 Out
DeLisle: Primer 1: Alt
Mortgages pgs 48-72.
DeLisle, Housing
Affordability Cost Study
Problem Sets/Due Dates
Quiz 2 Out
Project 2 Alt
Mtgs. Out
Case 1: FD/BD Analysis
Case 2: DCF Analysis
DCF Enhanced
Primer 2: Rent Roll Modeling
in Excel
Project 3: DCF
Leases Out
Prob Set 2: Intro to Mortgage
Finance
Mortgage Project 1 Due
Prob Set 3: Intermediate Mtg
Fin; Quiz 1: Due
Mortgage Project 2 Due
Quiz 2: Due
Prob Set 4: Intro Corp RE
To be assigned
Ch 15 Value, Leverage
Prob Set 5: Adv Corp RE
Ch 12: Controlling
Risk;
To be assigned
Quiz 3: Out
http://jrdelisle.com
Project 3: DCF Leases Due
James R. DeLisle, Ph.D.
7
2/16
2/18
8
2/23
2/25
9
3/02
3/04
10
3/9
3/11
11
Finance
Financing & Land
Development
Real Estate
Portfolio
Management
3/15
Real Estate Finance, Winter 2010
Ch 18: ADC Loans
Argus Model Tutorial
Ch 21: RE in a
Portfolio Context
DeLisle, “A Holistic RE
Portfolio Mgmt.”
To be assigned
Primer 3: Argus Project
Analysis
JVs, Syndications,
Partnerships,
Public Equity
Market
Ch 20: Ownership
Secondary Market:
Pass-Throughs
Secondary Market:
CMOs, CMBSs
Issues in RE
Finance
Finals Week
Ch 10: Secondary
Market
Ch 11: Valuation of RE
Securities
Ch 22: Liability, Fraud
and Ethics.
Ch 17: Sources of
Funds
Primer 4: Argus Portfolio
Analysis
Proj. 4: Argus RRDCF Out
Proj. 5 Argus
Portfolio: Out
Quiz 4: Out
Project 4: Argus RR-DCF
Final Out
Final Exam
www.reuw.washington.edu
Project 5 Argus: Due
Quiz 3: Due
Final Due 3/21
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