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University of Michigan

Real Estate Development: Building Value in Your Community

University of Michigan via Coursera

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Overview

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“Real Estate Development: Building Value in Your Community” provides an introductory understanding of real estate and community development. You will learn the fundamentals of real estate development, including development stages, team building, project feasibility, social impact, and financial modeling. Through immersive, augmented reality experiences, you will be able to identify and analyze neighborhood-scale real estate development projects to determine feasibility and understand the implementation process. The course's unique focus on the community's history, demography, and culture will equip you with the knowledge to develop projects that center the community you’re building them in. By the end of the course, you will have gained the skills and knowledge to begin working with your community to invest in your area and create a positive impact for years to come.

Syllabus

  • Introductions & General Principles
    • Welcome to the course! In this module, we will explore the concept of "real estate development." We'll outline the roles and responsibilities of real estate developers and discuss the steps involved in each phase of a development project. Additionally, we'll consider how important it is to manage time effectively throughout a project.
  • Idea and Approach
    • In this module, we will discuss strategies developers employ to evaluate which projects to pursue. We'll consider what kinds of goals motivate various developers, and discuss the implications of those motivations on project choices. We’ll close with an exploration of different types of risk, showcasing how to bring together all of the concepts discussed in this module in an authentic scenario where we walk through a project evaluation exercise.
  • Feasibility Through Due Diligence
    • In this module, we will explore the importance of conducting due diligence to identify potential risks, liabilities, and obligations before purchasing a property or pursuing a project. We will also discuss strategies to mitigate risk, including analyzing comparative sales, researching market rent data, and developing detailed construction budgets. We’ll conclude by examining how to build a project’s capital stack to ensure that there are enough capital sources to cover all of a project’s intended uses.
  • Financing
    • In this module, we will delve into the financial benefits of real estate and begin to understand how to analyze a project’s financial performance. We will discuss how to approach a lender and how they evaluate real estate projects. We’ll also discuss the difference between using debt in your real estate project versus exclusively using equity, and the impacts of both on a project’s financial returns. We will close by explaining return metrics and the variables needed to calculate such metrics.
  • Financial Modeling
    • In this final module, we will explain how to interact with and evaluate a real estate financial modeling tool known as the “pro forma”. We will demonstrate how to input assumptions, market data, and other property information and then evaluate a project’s feasibility and financial performance. By walking through a case study, we will explore the various tabs in the pro forma and how such information functions together. We will close by performing a sensitivity analysis using the pro forma to examine the best, most likely, and worst-case scenarios for the real estate project modeled in the case study.

Taught by

Chase Cantrell

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