Real Estate Crowdfunding Special Offer
8 Financial Keys PLUS Due Diligence PLUS 8 Phases of Development
In this exclusive special offer you are getting three full courses all in one, over 13 and a half hours of some of most advanced real estate investing education in the country, and the ONLY course ever to have been taught to graduating students at one of California's top universities.
Here's what you're getting:
The 8 Financial Keys to Real Estate Investing
With the 8 Financial Keys course you get 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.
Due Diligence for the Real Estate Investor
In the Due Diligence for Real Estate Investors course, you'll get a deep dive into all the most important review hurdles a sponsor must clear before proceeding with a deal – and before asking you to invest.
This course incorporates extensive use of case studies, spreadsheets, and data to explain the broad array of due diligence items professionals use to analyze deals. In so doing, you will learn what to look for to ensure that a sponsor has been thorough in their work, as well as be provided with tools for double checking key assumptions.
The areas covered are as follows:
You are going to learn about market and zoning issues, highest and best use analyses, design specifications, repositioning strategies and much more so that you can tell if the proposed project is viable and prudent for its location.
Using actual case study documentation, in the legal review section you are going to learn about title reports, environmental hazards, how to review basic legal documents and the key items that you want to be looking for in any contract, and why you still need an attorney but can substantially reduce the cost of using one.
This legal review section is designed so you can drill down on deal breakers in a project before spending too much time AND save money on attorney fees by being efficient with their time.
In this site analysis section, you will examine the kinds of third party reports that are commonly used and why they are important.These include, for example, surveys, property condition reports, soils analyses, environmental reports, grading, and traffic studies so you can recognize the tools a developer has at his disposal and know how to interpret their findings.
4. Regulatory Analysis
In looking at how a sponsor handles regulatory issues you are going to learn about how and why developers need to be in close communication with local planning staff at the city.This so you can understand land use issues, density, parking requirements, variances and the overall entitlement process including local political factors.Once complete you will be able to decide if a project has too high a risk of not being developable as proposed or that it will take too long to be allowed by the city.
One of the due diligence line items most sensitive to error is the market analysis.In this section you are going to learn about independent market studies, use of appraisals, the impact of demographics on a deal, how to build absorption predictions, the importance and use of looking at similar – comparable – properties, and demand and supply factors.
If you are concerned that key proforma assumptions are accurate, then this section will help you assess if supply and demand for the proposed project is going to realistically meet the way the sponsor is saying they will.
6. Cost Assumptions
Building a proforma is more about the quality of the assumptions underlying the inputs than it is about anything else.In this section you will see how how developers select their sub-contractors (lowest bid not always the best option), and how they gather cost estimates from general contractors, sub-contractors, for soft costs and for the entitlement process.
At the end of this section you will be able to decide if there is enough detail in the deal’s budget and that sufficient work has been done to make sure the project does not go over budget – keeping in mind that projects are seldom ever on budget.
As sponsors flesh out the underlying assumptions, they build spreadsheet based proforma projections.In this section you will learn how they use the spreadsheets to create a roadmap for all assumptions, how to stress test assumptions (and why this important), and overall financial risk assessment.In understanding these skills you will be able to tell how much attention to detail the developer has put in to the deal and how well analyzed are their proposed project.
Time in money, and in this section you are going to learn about how sponsors employ critical path analysis to plan their projects, the importance of projecting key dates, different types of timeline analysis, and how to use timelines to stay on schedule.Understanding timeline planning will help you to decide if the project has a reasonable chance of being completed in the time that the developer thinks it will – while keeping in mind that they almost never do.
The sponsor needs your capital to proceed with the project so in this section you are going to learn about how to verify that there is enough capital overall to do the deal, and what tools are used to attract debt and equity – this so you can tell if the sponsor has credible financial backing and has already lined up all key finance before coming to you for investment.
Finally, in this course I will share with you a technique to effectively evaluate how thorough overall a sponsor has been with their due diligence.This is something that I learned how to use when I was president and CEO of a JV between Universal Studios and Paramount Studios building out part of their real estate portfolio throughout the Asia Pacific region with a $400 million budget and reporting requirements to two of the largest public companies in North America.The methodology is so robust that I have also used it to remodel my own kitchen.Utilizing this skill you can look at absolutely any deal and discover everything you need to from the developer – including how well they know their own deal.
The 8 Phases of Development
In this course, you'll learn all the phases of development that any competent developer has to go through when they find a deal and develop it - and the key here is that you'll discover that as a passive investors in a crowdfunded syndication, there's only ONE THING that you need to do.
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.