Real Estate Investment

by Wiedemer,John P.

• ISBN13: 9780324143928
• ISBN10: 0324143923
• Edition: 6th
• Format: Hardcover
• Copyright: 2002-04-15
• Publisher: Cengage Learning

Summary

The goal of Real Estate Investment, 6e, is to describe investing in a concise and practical way by explaining the factors and analysis involved in making investments wisely. A new section on computer-aided analysis is included to emphasize the use of computer in preparing a proper analysis of an investment opportunity. The tax laws and regulations applicable to investing are also discussed in this text by two highly respected authors in the real estate field.

Table of Contents

Preface	ix
Real Estate as an Investment	1	(18)
Advantages of Real Estate as an Investment	3	(3)
Disadvantages of Real Estate as an Investment	6	(1)
The Value of Land	7	(2)
Categories of Land Use	9	(3)
Acquiring Real Property	12	(4)
Organization Costs	16	(2)
Financing Charges	18	(1)
Land Use Controls	19	(14)
Land Use Controls	19	(2)
Zoning	21	(1)
Building Codes	22	(1)
Subdivision Requirements	23	(1)
Planning	23	(1)
Restrictions by Private Agreement	24	(1)
Eminent Domain	25	(1)
Do Restrictive Rules Classify as a Taking?	26	(2)
Government Influences on Land Use	28	(1)
Land Restrictions Due to Lack of Service	28	(3)
Environmental Impact Statement	31	(2)
Environmental Constraints	33	(24)
How the Environment Affects Humans	34	(1)
Environmental Issues Examined	35	(1)
Toxic Waste Sites	35	(7)
Lead Poisoning	42	(1)
Indoor Air Pollution	43	(4)
Clean Water Measures	47	(1)
Wetlands Protection	48	(4)
Storm Water Runoff Regulations	52	(1)
Endangered Species Protection	53	(1)
Underground Storage Tanks	54	(1)
Electromagnetic Forces	55	(2)
Ownership of Real Property	57	(18)
Classification of Estates	58	(2)
Major Classes of Estates	60	(7)
Classification of Property Ownership	67	(3)
Trusts	70	(5)
Legal Documents	75	(16)
The Deed	76	(2)
The Earnest Money Contract	78	(4)
The Commercial Lease	82	(9)
Property Taxes and Income Taxes	91	(18)
Property Taxes	91	(4)
Federal Income Taxes	95	(1)
Business Income	95	(4)
Types of Income for Tax Purposes	99	(2)
Determining Capital Gain	101	(6)
Allocation of Land Cost and Building Cost	107	(1)
Cost Recovery for Other Tangible Property	107	(2)
Special Income Tax Rules Applicable to Real Estate	109	(16)
Tax Credits	109	(5)
Tax-Defferred Exchange of Property	114	(3)
Involuntary Exchange	117	(1)
Installment Sales Method	118	(4)
Sale-and-Leaseback of Real Property	122	(1)
At-Risk Rules	123	(2)
Single-Family Dwellings and Condominiums	125	(16)
The Principal Residence	126	(4)
Residence Converted to Rental Use	130	(3)
Part-Time Rental Units	133	(3)
Time-Sharing Ownership	136	(1)
Condominiums	137	(4)
Business Organizations	141	(18)
Sole Proprietorship	141	(2)
Partnership	143	(4)
Joint Stock Companies	147	(1)
Limited Partnership	147	(2)
Joint Venture	149	(1)
Limited Liabilities Companies	149	(1)
Real Estate Syndicate	150	(1)
Corporations	151	(3)
S Corporations	154	(2)
Comparison of Business Organizations	156	(3)
Financing Real Estate Investment	159	(28)
Primary Mortgage Market	160	(1)
Secondary Mortgage Market	161	(2)
Effect of Underwriting on Commercial Borrowers	163	(1)
Why Borrow Money	164	(2)
Debt Service to Net Operating Income	166	(2)
Participation by Mortgage Lenders	168	(1)
Financing Costs	169	(5)
Are Long-Term Loans Higher Cost?	174	(1)
Mortgage Loan Amortization	175	(2)
Mortgage Repayment Plans	177	(4)
Mortgage Variations	181	(6)
Tools of Analysis	187	(20)
Balance Sheet	188	(1)
Profit-and-Loss Statement	189	(1)
Operating Statement	190	(2)
Pro Forma Statement	192	(1)
Income Tax Statements	193	(1)
Accounting Methods	193	(1)
Preparation of Statements	194	(2)
Problem Areas in Financial Statements	196	(1)
Supplemental Information	197	(4)
Statement Analysis	201	(3)
Amortization Tables	204	(1)
Loan Constant	205	(2)
Comparison Screening	207	(18)
Popular Guidelines	208	(2)
Property Income and Expense Analysis	210	(6)
Property Appraisals	216	(6)
Feasibility Report	222	(1)
Physical Inspection	223	(2)
Discount Analysis	225	(20)
The Time Value of Money	226	(1)
Compound Interest	227	(2)
Discounting Cash Flows	229	(5)
Present Value Approach	234	(3)
Internal Rate of Return (IRR)	237	(4)
Problem Areas in Computations	241	(1)
Listing Properties with Discounted Cash Flow Techniques	241	(4)
Computer-Aided Analysis	245	(16)
Cash Flow Projections	246	(9)
Investment Analysis	255	(3)
Analysis of Offer to Purchase	258	(3)
Examining Real Property Risk	261	(22)
Risk Associated with Income Stream	262	(1)
Other Risks for Land Owners	263	(2)
Leases	265	(5)
Operation and Income Properties	270	(6)
Land as an Investment	276	(4)
Land Development	280	(3)
Marketing Investment Property	283	(21)
Apartments	284	(3)
Office Buildings	287	(4)
Retail Store Centers	291	(5)
Warehouse Buildings	296	(4)
Special Purpose Buildings	300	(1)
Business Properties	301	(2)
Conclusion	303	(1)
Glossary	304	(11)
Appendix	315	(5)
Index	320