Here's what you can expect from this course.
The eight keys section involves a deep dive into core concepts that are used by every developer, across every real estate type irrespective of the development strategy employed, to structure a deal, evaluate its viability, and to describe the deal to investors and other financiers. These concepts are central to every deal an investor might see and so are considered the 8 keys that open every door in real estate.
Incorporating spreadsheet examples, this section is heavily oriented to financial analysis, and is broken down into varying levels of complexity to enable the student to learn complicated concepts at easy to understand levels as well as to see how they are applied by professionals.
The course, by name and nature, is split up into eight sections that, supported by spreadsheet walkthroughs, as follows:
1.Net Operating Income
Driving most financial concepts in evaluating a deal is the uppermost question of how much money will the deal make, and underpinning that idea is the net operating income for a project.In this section you will learn what it is exactly and how it is calculated so you can assess how profitable a deal is going to be and, by stress testing the assumptionsbehind the calculation, how robust is the sponsor’s financial model.
While one of the most important calculations a sponsor can make to establish value of an asset during its entire lifecycle, the capitalization (cap) rate is often misunderstood.By clarifying exactly how it works, you will be able to identify inconsistences across deals and so be better equipped to properly compare opportunities you are looking at – no matter the asset class or investment strategy being employed.
Often the first thing you want to know, and last thing you want to be sure of, returns are the primary measure of how much you are going to make on a deal.This simple key concept can be, however, broadly defined and with little or no formal training that qualifies people to be developer/sponsors, there have emerged a range of ways in which ‘returns’ are defined in the industry.This section gives you the skills to be able to recognize all they ways in which you can be compensated for your investment dollars as well as the terminology that is used throughout the industry.
Relevant for gaining an overall picture of the extent to which your investment is projected to perform during the life of a deal, learning how equity multiple is calculated will help you to understand how to use it alongside other key concepts to gauge the overall opportunity from any given deal.
5.Internal Rate of Return
Undoubtedly one of the hardest concepts to understand because of its reliance on complicated financial formulae, this section breaks the internal rate of return (IRR) down into easy to understand components.Once you complete this section you will be able to calculate IRR for any deal, verify that a sponsor has correctly applied it, and use it to compare deals across real estate types and development strategies.
Distinct from general return concepts that apply to the overall deal itself and how your investment will perform, in this section you will learn that the preferred return forms a key component to the enticement a sponsor is offering for your investment.You will learn how it is calculated, what it is usually paired with to drive the investment decision, and, importantly, how to confirm that there is consistency between pitch deck and contract.
7.Promote and Fees
Being a zero-sum game, investing in real estate means that any part of the profit that you get in return for your investment, the sponsor does not.In this section you will learn exactly how the sponsor is compensated for their time and effort, how so-called waterfalls work, and how to ensure that there is the all-important alignment-of-interest between you and the sponsor.
The concept leverage speaks to your rights and responsibilities as it pertains to the capital stack.Employing groundbreaking teaching methodology, this section explains how important it is that you know where you stand in the capital stack relative to other investors and lenders, and how this can affect your best interests.You will also learn how leverage is used, for better and for worse, as well as some key metrics used by lenders/banks in assessing if a deal is creditworthy.
Start7.0 The Eight Keys - Intro (4:49)
Start7.1 The Eight Keys - NOI (2:28)
Start7.1.1 The Eight Keys - NOI Spreadsheet (69:58)
Start7.2 The Eight Keys - CAP Rates (43:19)
Start7.2.1 The Eight Keys - CAP Rates Spreadsheet (10:41)
Start7.3 The Eight Keys - Returns (21:46)
Start7.3.1 The Eight Keys - Returns Spreadsheet (8:52)
Start7.4 The Eight Keys - Equity Multiple (10:13)
Start7.4.1 The Eight Keys - Equity Multiple Spreadsheet (4:28)
Start7.5 The Eight Keys - IRR (32:46)
Start7.5.1 The Eight Keys - IRR Spreadsheet (20:19)
Start7.6 The Eight Keys - The Pref (21:45)
Start7.6.1 The Eight Keys - The Pref Spreadsheet (14:08)
Start7.7 The Eight Keys - Promote and Fees (35:35)
Start7.7.1 The Eight Keys - Promote Spreadsheet (3:46)
Start7.8 The Eight Keys - Leverage Part I (22:43)
Start7.8 The Eight Keys - Leverage Part II (23:22)
Start7.8.1 The Eight Keys - Leverage Spreadsheet (10:22)
Start7.8.2 The Eight Keys - LTV Spreadsheet (0:24)
Start7.8.3 The Eight Keys - DSCR Spreadsheet (3:33)
Start7.8.4 The Eight Keys - Expense Ratio Spreadsheet (1:48)
Start7.8.5 The Eight Keys - Amortization Spreadsheet (4:54)
StartCore Course #1 SpreadSheet
Dr. Adam Gower is the world's foremost expert on raising real estate capital online.
He has combined his decades long experience in real estate investment and finance with best-of-class digital marketing techniques to create the Investor Acquisition System - a process utilized by sponsors and crowdfunding platforms to raise hundreds of millions of dollars.
He has held senior management positions at some of the largest real estate companies and institutions in the world and is recognized as an industry thought leader on the impact of crowd funding on the industry. During the 1990’s he was President and CEO of a division of Universal Studios developing their real estate portfolio throughout the Asia Pacific Region. After the financial crisis of 2008 had taken hold, Dr. Gower advised major regional banks and the world's largest private equity fund on their asset disposition strategies, assisting them to divest of large portfolios of real estate collateralized loans, and personally transacting in excess of $1.5 billion in real estate of all types.
Dr. Gower builds digital marketing platforms for developers so they can raise capital online and has taught the only fully accredited course in the country that focuses on real estate syndication investment via crowdfunding.
His first book Jacob Schiff and the Art of Risk, (New York: Palgrave Macmillan, 2018) examines how investment banks mitigated risk in the early 20th Century and his work linking regulatory changes of today with practices described in this book are considered by many as being groundbreaking.
His second book, Leaders of the Crowd, (New York: Palgrave Macmillan, 2019) is based on his internationally syndicated podcast series, The Real Estate Crowdfunding Show, Syndication in the Digital Age. Dr. Gower is the founder of GowerCrowd, the real estate syndication industry's leading resource for news, training, and online education for both sponsors and investors alike.
Visit GowerCrowd.com for free resources and more information.