Real Estate Finance: Fundamentals

The Real Estate Finance: Fundamentals course is a “finance boot camp” for real estate developers, investors, lenders, lawyers, and other real estate professionals who need to analyze the financial feasibility of real estate development ventures.

Participants will gain a comprehensive understanding of how investment returns are calculated and how income producing assets are valued. Designed for those without a financial background, this course integrates finance theory and taxation principles with conventional real estate practice.

Computer Requirements:

Laptops or tablets are required as course materials will be distributed electronically.

Earn a Professional Certificate in Real Estate Finance and Development
This course is part of the Real Estate Finance and Development certificate program, offered jointly by MIT Professional Education and the MIT Center for Real Estate. 

Learn more about how you can earn a Professional Certificate when you take this and other real estate courses.

This course has been approved for 16 CPD credits toward renewal of the CoreNet Global MCR designation.

Lead Instructor(s): 

Walter Torous


Jun 10, 2019 - Jun 11, 2019

Course Length: 

2 Days

Course Fee: 





  • Closed

It is highly recommended that you apply for a course at least 6-8 weeks before the start date to guarantee there will be space available. After that date you may be placed on a waitlist. Courses with low enrollment may be cancelled up to 4 weeks before start date if sufficient enrollments are not met. If you are able to access the online application form, then registration for that particular course is still open.

Registration for the 2018 session has closed. We'll open for the 2019 session this fall.

Participant Takeaways: 

Participants of this course will:

  • Understand the financial infrastructure underpinning real estate development
  • Learn how financial drivers such as capital structure, investment returns, and taxes motivate stakeholders
  • Understand the combination of factors that determine financial feasibility

Who Should Attend: 

This course is applicable to a wide range of professionals across the real estate, banking, finance/investment, and insurance industries. Specifically, the course may be of interest to fund managers, investment portfolio managers, financial advisors, investment bankers, fixed-income analysts, financial risk managers, global financial market specialists, and professionals working in macroeconomic policy. More generally, this class can be valuable to anyone dealing with global financial markets and real estate investments.

Program Outline: 

8:00 am – 9:00 am: Registration, breakfast.

9:00 am – 10:30 am: Prepare the development budget: estimate and categorize projected development costs; calculate construction period interest expense.

10:30 am – 10:45 am: Break

10:45 am – noon: Prepare the property income statement: forecast revenues, expenses, and Net Operating Income (NOI); project net proceeds from sale.

Noon – 1:00 pm: Lunch

1:00 pm – 2:30 pm: Understand the inputs, calculation, and constraints associated with static and dynamic measures of investment return: Free-and-Clear return, Cash-on-Cash return, Internal Rate of Return (IRR), and Net Present Value.

2:30 pm – 2:45 pm: Break, refreshments served

2:45 pm – 4:30 pm: Determine the required amount of equity investment. Properly apply the time value of money concept to the relevant property cash flows and master the mechanics of performing discounted cash flow analyses. Develop an understanding of the uses and abuses of “cap rates.”

8:30 am – 9:00 am:

9:00 am – 10:30 am: Identify the impact on investment returns and risk of introducing permanent debt into the capital structure of the investment.

10:30 am –10:45 am: Break

10:45 am – noon: Calculate lender yields and effective borrowing costs. Understand how much money a lender is willing to lend on a project and why. 

Noon –1:00 pm: Lunch

1:00 pm – 2:30 pm: Properly calculate the accounting fictions known as taxable income and taxable gain-on-sale; identify expected annual tax liabilities or savings.

2:30 pm – 2:45 pm: Break, refreshments served

2:45 pm – 4:00 pm: Develop projections of after-tax cash flows and calculate after-tax investment returns. Quantify the value of zoning changes for developers, landowners, and municipalities (time permitting).

Course Schedule: 

Course runs 9:00 am – 4:30 pm on Monday, and 9:00 am – 4:00 pm on Tuesday.

Participants’ Comments: 


“The program packs a punch into the two days. Tod McGrath is one of the few people I’ve met who can make finance both interesting and amusing. He creates a comfortable atmosphere that is conducive to people of all ages learning.”


“Tod is a very engaging and has a strong command of the real estate industry. Through the presentation of financial calculations investors use I am more confidant in performing financial models resulting in purchasing or leasing a facility.”


“Attending MIT [CRE] for the Real Estate Finance: Fundamental course has given me the fundamental financial concepts applicable to real estate development. The instructor was very experienced and knowledgeable and was able to answer questions with facts and figures. The environment was conducive and a worthwhile experience.”


“A great refresher course, even for real estate professionals with experience. Engaging instructor and great tips.”


“I always regretted not adding an MBA to my JD. This course offered a great opportunity to learn the fundamentals of real estate finance to enhance my practice. It was a perfect survey for professionals supporting the real estate industry – informative without being overwhelming.”


“Excellent course on the fundamentals of finance, and specifically real estate finance. Tod is an excellent teacher and was able to break down concepts much better than many of my MBA professors.”


“Although not new concepts, by far the best delivery of these concepts I have been involved with.”


“Clarified methods to determine the real value of real estate projects.”


“Tod is an engaging and very knowledgeable instructor. He is excellent.”


“Great course- very informative. I will be recommending future offerings to my colleagues.”



This course takes place on the MIT campus in Cambridge, Massachusetts. We can also offer this course for groups of employees at your location. Please complete the Custom Programs request form for further details.


Fundamentals: Core concepts, understandings, and tools (45%) 45
Latest Developments: Recent advances and future trends (10%) 10
Industry Applications: Linking theory and real-world (45%) 45

Delivery Methods: 


Lecture: Delivery of material in a lecture format (50%) 50
Discussion or Groupwork: Participatory learning (50%) 50


Introductory: Appropriate for a general audience (75%) 75
Specialized: Assumes experience in practice area or field (25%) 25