Calculating the cash flow statement for real estate is the initial step in our analysis.  We will look at rent schedules, vacancy, operating expenses, and the net operating income—the sources for the information and for locating comparable properties.

Once we have finished calculating the Cash Flow, in the remainder of the course, we’ll explore investment ratios, expense factors, mortgage loan constants, and equity yields on a before and after-tax basis. Additional subjects include Cap Rates and the differences between favorable and unfavorable leverage.  You will learn how to calculate the cash-on-cash return, internal rates of return, present value, net present value, and other yield measurement techniques.

We will look at specialized ratios such as Equity Dividend Rate, Return on Equity, Return on Assets, and the Break-even ratio. We will also review the calculation and use of a sensitivity analysis.