CRE Education Modules

Learn commercial real estate one idea at a time.

Learn commercial real estate on your phone or computer.

Beginner

Module 1

Understanding cap rates

A cap rate is the return you want from a building: what a safe investment pays plus extra for the risk. Drag the two rates and watch what the same NOI is worth.

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Module 2

Amortization

The same payment every month, but the split between interest and paydown moves. Drag the rate, the amortization, and the term and watch what is still owed when the loan comes due: the balloon.

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Module 3

Develop vs. Acquire

Build it or buy it: what the same income costs at the market cap rate and at a development cost, and the spread between the two.

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Moderate

Module 4

Cash-in or cash-out refinance

Replace the old loan with a new one. Drag the valuation and the new loan, and watch where the money goes and how the investors’ return splits between cash in hand and equity still in the building.

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Module 5

Loan sizing

How a lender decides the most it will lend: loan to value, debt yield, and debt service coverage on one axis, and which one holds the loan down.

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Module 6

Value-add business plan

Own a building, then put more money into it at a higher return. Drag the spend and its return and watch the all-in yield on cost climb past the yield you bought at.

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Advanced

Module 7

The waterfall

Who gets the cash when the building sells, the LPs or the GP. The cash fills the tiers in order and each tier splits between the two. Drag the cash and the years held and watch each part fall into its row.

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