Chpt 20 - Chapter 20 - Real Estate Investment Decisions...

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Chapter 20 - Real Estate Investment Decisions Introduction Most real estate decisions are made with an _________________ motive. The ____________ of expected cash flows—and the property values they create —are at the center of investment decision making Ch ____ introduced standard industry approach to estimating NOI and Ch ____ (we covered within other chapters) provided ratios to help make valuation and investment decisions These criteria are relatively __________ to calculate and understand—a decided advantage in the eyes of many industry professionals. Problems with Ratios __________ of these single-year return measures and ratios? o They do not incorporate the income producing ability of the property ______________________ of rental operations o Focusing only on cash flow magnitudes and ratios in the _____ year after acquisition may lead to ____________ investment decisions. Ratios Solution To overcome ___________ of single-year decision making metrics, many investors also perform ____________ analyses of potential acquisitions When using these multi-year discounted cash flow (DCF) decision making methods, the investor must 1. estimate how long he/she expects to _________ the property 2. make ___________ forecasts of the property’s NOI for each year of the expected holding period, including the net cash flow produced by the sale of the
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This note was uploaded on 11/05/2009 for the course ECON 4010 taught by Professor Staff during the Fall '08 term at University of Georgia Athens.

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Chpt 20 - Chapter 20 - Real Estate Investment Decisions...

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