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Revere Street- Part I (Multifamily) Roger Staiger III, FRICS (202) 640-8912 Purpose Gain Understanding of owner/developer issues within Real Estate Finance  Understand tools and methods for evaluating projects  Understand general structure of a project pro forma using multifamily case study  Gain basic ability to construct a project pro forma  Develop initial tools to quantify a project  2 of 82 Vehicle for Understanding  Harvard Business Case  Relate to Personal Projects  Individual investor/developer seeks to learn Real Estate Finance through actual investment 3 of 82 Revere Street Case Summary Edward Alexander wants to invest in Real Estate  Alexander has $80,000 to invest  …show more content…
He has $20,000 to invest and the cost of the complex is $175,000. He anticipates that with the current market he will be able to finance 95% of the building. He anticipates the following costs for the purchase: Legal Fees ($2,000), Title Insurance ($1,000), and Mortgage Origination ($3,000). He views this as a low risk project and therefore expects the capitalization rate for the project to be 8.0% for the foreseeable future. 16 of 82 Does John have sufficient funds? Construct Sources and Uses Statement  Determine if available / identified financing sufficient to cover initial pricing  Determine answer to Question #1  17 of 82 Sources and Uses Statement Sources Debt Equity Total Sources Uses Purchase Price Legal Fees Title

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