Because over 60% of the total of single-family debt in the US had been securities by 2006, the bursting bubble in home prices was felt throughout the global economy. The recession also cut off access to the capital market, which had been providing 30% of debt capital for CREE and drove down perceived values. Since real estate is a capital-intensive asset class, more so than most other classes, the subsequent reduction of debt sources and the tightening of underwriting standards greatly reduced real estate transactions and consequently prices of real estate.
This course will cover, briefly, different structures of single-family retrogress, but primarily focus on the financing and investment of CREE, the impact of debt on equity turns, the concepts underlying the characterization of CREE debt and equity. 2. Prerequisites and Course Materials Satisfactory completion of FIN 3000 is a prerequisite for this course, in particular, a solid understanding of the basic tools of finance: discounting of cash flows and the time value of money.
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To that end, you are required to own (and have with you for each class) a financial calculator. No particular calculator is proscribed. However, the instructor will be using is class a HP ICC. The textbook for the course is one which seems to be universally used for real estate finance and investment, Real Estate Finance and Investments 14th edition, by William Bargeman and Jeffrey Fisher, published by McGraw-Hill. Whether you buy it or rent it from the Branch Bookstore or get it from Amazon, eBay matters not to me. But you must have it. 3.
Grading Attendance/Class participation: I am required to drop you from the class if you have more than four absences and you are a freshman or a sophomore. If you are a junior or senior, it is at my discretion to drop you from the class if o have more than four absences. Also, although there are almost 40 students in the class, you are encouraged to be proactive in class to the extent possible. This is an easy just show up and speak up, making rational comments. Quiz: A short in-class quiz will be administered after the first couple of weeks of the course.
This will be worth 5% of your total grade. A poor performance on this quiz may indicate that you must review your fluency in financial economics to determine if you will be able to complete the course in a satisfactory manner. Homework: There will be one three-part emperor assignment during the semester which will be, in the aggregate, of your grade. Homework assignments late will be penalized. Exams: There will be novo exams: a midterm exam on March 19 and a final exam during the week of May 18.