Customer Reviews

Private Real Estate Investment: Data Analysis and Decision Making (Academic Press Advanced Finance)

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I work as an analyst at a small real estate development and finance firm, and I am always on the lookout for good texts. As a person with a mathematics background, I hate how most real estate books go to great lengths to avoid "hard math". In the end, many of these so-called "advanced" texts leave out important parts, or end up trying to reduce mathematical relationships to mere words. In so doing, they make what should be simple ideas into an impenetrable mess.

Roger Brown's book nicely sidesteps this problem, and immediately gets into non-trivial ideas that one would be hard-pressed to find in a standard textbook. Typical of this is his Chapter 3, "The Rules of Thumb". Instead of simply defining terms such as "cap rate," and maybe discussing some of the limitations of this tool, Brown brings up the real world: cap rates can easily be distorted, and it is your job as an analyst to determine if the cap rate you are using is an "honest one". Brown shows just how one can systematically do this using a corpus of transaction data, which can be found on sites such as costar.com.

There are numerous other innovative ideas in the book. My feeling is that if you have good access to data, and are smart and diligent, you could make a lot of money using some of these ideas .