REAL 5090:

REAL ESTATE INVESTMENT

Fall 2023 · 9:35-10:50 AM · Tues & Thurs · 265 Park Hall

About this course

How do real estate professionals determine if a
prospective property is worth buying? How does
an owner choose whether to renovate a property,
sell it, or do nothing? How does the the
interaction of tenants and landlords impact
investors and their returns?

The answers to these fundamental questions form

the core of real estate investment and the focus of
this course. Join us this semester as we explore
the strategies and knowledge that successful real
estate professional use to make investment
decisions.

Whether your future goals include investing for personal wealth or working
in the real estate industry (e.g., lender, attorney, portfolio manager), the
skills you learn in this class will help you understand how to analyze real
estate investments.

Darren K. Hayunga, Ph.D., C.F.P. A418 Moore-Rooker Hall

hayunga@uga.edu (not eLC email) O) 706.542-1365
Office hours: TR 2:30 - 3:30 PM H) 706.705.1580
https://www.terry.uga.edu/directory/darren-k-hayunga/
What we'll accomplish

The learning objectives for this course center

around three topics. These objectives are the
targets each student should hit by the end of the
semester, and will with appropriate effort. The
outcomes listed below are the smaller, measurable
steps we'll take to reach the target You'll know
you are on track if you are able to do the things
listed as outcomes

Learning Objectives Outcomes

Construct a complete real estate Select the analysis method

proforma and use it to evaluate a Organize the cash flows
real estate investment. Determine the discount rate

Construct an analysis to
Organize the cash flows
determine the best course of
Evaluate the discount rate
action to take during the
Differentiate between renovation,
ownership of a real estate
holding, and selling
investment

Interpret the inputs, outputs, Identify and organize the components of

and flows between the three the Real Estate System
major markets within the Real Apply the concepts to investment
Estate System properties
 At a glance

I want each of you to

succeed in this course. I
will do whatever I can to
support you. Here's
what you'll need to do to
REAL 5090 can be challenging, in part, because
be successful:
it requires quantitative analysis. The keys to
Attend all class
success are advance reading, consistent active
sessions
participation in class, collaboration with fellow
Participate in class
students in and out of class, working
activities
problems, and completing the models. If you
Complete assigned
work regularly and allocate enough time each
readings prior to
week to keep up with the course, you will get
class
the most out of the course both intellectually
Complete 6 smaller
and grade-wise.
assignments
Complete the
Attendance and Participation analysis of the
Course attendance and participation have Braeswood and
proven to be essential to earning a high grade Cardinal properties
in RE Investment. This is a discussion and Complete the
project-based class. We will discuss the analysis of a Harvard
material in class that directly relates to you Business Case
becoming a successful real estate professional.
Additionally, we will clarify several difficult
topics that are not well explained in the
textbook.
Class participation depends first on students attending class. I will use
name tents to collect the attendance data. Students who do not pick up
their name tents at the beginning of class will be noted as absent.
Absences will be excused and not reduce the A&P grade with proper
documentation. Doctors' notes, funeral bulletins, and airline tickets for job
interviews are examples of accepted documentation. A lack of
documentation results in an unexcused absence, and it is the student's
responsibility to provide documentation in a timely manner.
Course Participation

The other portion of the grade is participation in (and out of) class. Class
participation means that students are physically and mentally engaged.
Meeting me during office hours also counts towards course participation.

The following is the rubric to determine course participation grades.

Students should be able to enhance their final grades by simply attending
classes and being conscientious learners. Not all students learn the same
way so students are free to choose their level of participation based upon
the following:

hethehljk;alkjd;lfka
An engaged student actively participates in class discussions and
8-10% of activities (e.g., working math problems), demonstrates that s/he
the final regularly completes the assigned reading, and is a good team member.
grade Students can have 2 unexcused absences class and earn 10%. Two
unexcused absences but not fully participating in class earns 9% or 8%.

Students who actively participate in class with 3 unexcused absences earn

5-7% of
7%. Students with 3 unexcused absences and are distracted by a phone or
the final
website, unable to answer a class question, does not work well with their
grade
teammates, and so forth will earn 6% and then 5%.

Students with 4 unexcused absences but participate when in class earn

1-4% of 4%. This level of class participation has been shown to reduce a student's
the final final grade. I want you to succeed so please speak with me if you expect
grade to miss more than 4 total classes (excused or unexcused). Students with 4
unexcused absences and do not participate earn 3, 2 or 1%.

0% of the
final Students with 5 unexcused absences will earn 0% for the A&P grade.
grade
Assessment
The final course grade is a weighted average of the following components:

Weighting Weighting
Scheme I Scheme II
Course Participation 10% 10%
Assignments 10% 10%
Exam I 15% 10%
Exam II 15% 10%
Braeswood Plaza 10% 10%
Cardinal Suites 10% 10%
Angus Cartwright HBC 15% 15%
Final Exam (Comprehensive) 15% 25%

The final grade weighting is spread over several assessments so that

students have many opportunities to succeed. I understand that students
have multiple commitments; consequently, this grading scheme allows
students to make their own choices regarding the level of activity for each
assessment.

The final grade is the weighting scheme that is better for you using the
following standard scale as the initial breakpoints:

A A- B+ B B- C+ C C- D F
100- 92.49- 89.49- 86.49- 82.49- 79.49- 76.49- 72.49- 69.49- 59.49-
92.50 89.50 86.50 82.50 79.50 76.50 72.50 69.50 59.50 lower

As an example of the two weighting schemes, say a student earns 100%,

100%, 60%, 70%, 95%, 87%, 90%, and 81% for the respective components
above. Weighted Scheme II will be used because it is better for the student:
Scheme I
(0.10 x 1.00) + (0.10 x 1.00) + (0.15 x 0.60) + (0.15 x 0.70)
+ (0.10 x 0.95) + (0.10 x 0.87) + (0.15 x 0.90) + (0.15 x 0.81) = 83.35%

Scheme II
(0.10 x 1.00) + (0.10 x 1.00) + (0.10 x 0.60) + (0.10 x 0.70)
+ (0.10 x 0.95) + (0.10 x 0.87) + (0.15 x 0.90) + (0.25 x 0.81) = 84.95%

The example also shows how the weighting schemes help students who
perform poorly on the first exams (60% and 70%) but demonstrate they
understand the material by the end of the semester on the final exam (81%).

There are six assignments that will help student understand the material
and meet the learning objectives for a particular module (and the overall
course). These assignments are due to the eLC dropbox by 5pm on the
deadline date listed in the course calendar (below). The 10% of the final
grade consists of:
Picture of the Real Estate System – 1%
TVM problems – 1%
Bulldog Investment Company analysis – 2%
Leverage problems – 2%
Whitehall Station analysis – 2%
Income tax analysis - 2%
Exams
The mid-semester exams will be 30–35
true-false and multiple-choice
questions and will be given during the
regularly scheduled class period. The
questions will emphasize lecture
material but all class material is
subject to examination. The final exam
is comprehensive and consists of 60–
70 questions with roughly 40-50% from
the material covered after the second
exam. The university has a clear policy
that the final exam must be taken at
the time scheduled unless a student
has 3 exams on that day.

There are no make-up exams. If you are unable to take an exam at the
scheduled time for any reason, you must discuss it with me prior to the
scheduled exam. If I approve your absence before the exam, the weight will
be shifted to the final exam. If you miss without approval, your exam score
will be zero.

Reading Day: Prior to the final exam, you can review your Exams I and II. I
will bring your exams to our classroom. Your attendance is optional but you
must attend at this time to review your exams as I will not have your exams
during the other section of REAL 5090.
Resources

Textbook
Geltner, Miller, Clayton, & Eicholtz, Commercial Real
Estate Analysis & Investments, 3rd edition, Thomson‐
Southwestern. Additional readings will be discussed,
which will be available on eLC and part of the
information that will appear on exams.

Textbook Resources
The answers to odd questions, PowerPoint presentations for each chapter,
and other resources are available at https://www.normmiller.net/?
page_id=82

Class Notes
Class notes are provided throughout the semester. Please be aware that
these are outlines and guides our in-class discussion. Students can use
them to direct their exam study but they are not a substitute for attending
class.

Teamwork
Peer instruction is one of the most effective methods of learning. If a
student can teach another team member, the teacher greatly solidifies the
knowledge in her or his own mind. Further, healthy discussion between
students has been shown to be a best practice.

Because real estate is generally a relationship business, we will work in

groups much of the second half of the semester. Every student should
select a semester group on eLC by 8/31. Anyone not in a group on 9/1 will
be randomly assigned a group.
CAPA Course Description: Quantitative methods for analyzing equity investment in
real estate, primarily larger income-producing properties. The analysis includes the
effects of financial leverage, income taxes, and unique selling strategies on investment
performance. Students determine investment decisions for several potential purchases
as well as a current portfolio property. REIT portfolios are also discussed.

Policies and Resources

Diversity: The Terry College of Business is committed to promoting an inclusive
learning and working environment among its students, faculty, and staff. This class
welcomes the open exchange of ideas and values freedom of thought and expression
and provides a professional environment that recognizes the inherent worth of every
person. It aims to foster dignity, understanding, and mutual respect among all
individuals in the class.

Academic honesty: "I will be academically honest in all of my academic work and will
not tolerate academic dishonesty of others." A Culture of Honesty, the University's
policy and procedures for handling cases of suspected dishonesty, can be found at
www.uga.edu/ovpi.

I take academic honesty seriously and will care out my responsibility to report a
violation if one occurs.

AI technology: Unless explicitly stated, artificial intelligence-based technologies, such

as ChatGPT, must not be used to generate responses for student assignments

Accommodations due to disability: If you plan to request accommodations for a

disability, please register with the Disability Resource Center (DRC). The DRC can be
reached by visiting Clark Howell Hall, by calling 706-542-8719 (voice) or 706-542-8778
(TTY), or by visiting http://drc.uga.edu.
Mental Health and Wellness Resources: If you or someone you know needs assistance,
you are encouraged to contact Student Care and Outreach in the Division of Student
Affairs at 706-542-7774 or visit https://sco.uga.edu. They will help you navigate any
difficult circumstances you may be facing by connecting you with the appropriate
resources or services.

UGA has several resources for a student seeking mental health services
(https://www.uhs.uga.edu/bewelluga/bewelluga) or crisis support
(https://www.uhs.uga.edu/info/emergencies).

If you need help managing stress anxiety, relationships, etc., please visit BeWellUGA
(https://www.uhs.uga.edu/bewelluga/bewelluga) for a list of FREE workshops, classes,
mentoring, and health coaching led by licensed clinicians and health educators in the
University Health Center. Additional resources can be accessed through the UGA App.

FERPA Notice: The Federal Family Educational Rights and Privacy Act (FERPA) grants
students certain information privacy rights. FERPA allows disclosure of directory
information (name, address, telephone, email, date of birth, place of birth, major,
activities, degrees, awards, prior schools), unless a
https://reg.uga.edu/_resources/documents/imported/FERPARequestForRestriction.pdf
is submitted to the Registrar's Office.
 Course Calendar

Readings
Module Date Class Topic Assessment Before
Class
Real Estate Investment Picture of RE System
8/17
and You (due 8/17)
1 8/22 Real Estate System 2.1-2.2
Supply, Market Segmentation,
8/24 1.1-1.3
and Capitalization Rates
TVM problems on eLC
2 8/29 Compound Interest 8.1
(due 8/29 before class)

8/31 EAR, ENAR, and Direct Capitalization 8.2 PDF

Periodic Returns and
9/5 9.1-9.2.1
Continuous Compounding
3
9/7 Multi-period Returns 9.2.4-9.3.2

9/12 Review for Exam I

9/14 Exam I: Modules 1, 2, & 3

Investment Fools and

9/19 pp 203–205
Market Pricing
4
Bulldog Investment
9/21 Zero-NPV and Hurdle Rates Company 10.4-10.7
(due 9/22)

5 9/26 Cash Flows 11.1

9/28 Discount Rates 11.2

Leverage Problems
10/3 Leverage 13.1-13.2
(due 10/6)
6
10/5 WACC and Exam II Review 13.3-13.4
 Readings
Module Date Class Topic Assessment Before
Class

10/10 Exam II: Modules 4, 5, & 6

Whitehall Analysis Property

10/12 Whitehall Station (due 10/18) packet
7
10/17 Whitehall Station

Income tax Analysis

10/19 Depreciation and Income Taxes 14.1
(due 10/25)
8
10/24 Depreciation and Income Taxes

Braeswood Analysis Property

10/26 Braeswood Plaza
9 (due 11/1) packet

10/31 Braeswood Plaza

On-going Investment Decisions Module

11/2
and Installment Sales packet
1031 Exchanges and
11/7
Cardinal Suites
10
Cardinal Analysis
11/9 Cardinals Suites
(due 11/15)

11/14 Cardinals Suites

11 11/16 REITS 23.1-23.2.1

Harvard
11/21 Angus Cartwright IV
case
11/23 Thanksgiving Break
12
11/28 Angus Cartwright IV

Final Analysis
11/30 Angus Cartwright IV
(due when entering class on 11/30)

12/6 Optional: review Exams I & II in same classroom at same class time

12/12 Comprehensive Final Exam, 8:00-11:00 am, same classroom

The course syllabus is a general plan for the course; deviations announced to the class
by the instructor may be necessary.