The Fundamentals of Commercial Real Estate Lending objective is to provide bankers with a basic understanding of commercial real estate lending concepts and techniques
Participants learn to:
Recognize the risks inherent in all areas of real estate lending.
Recognize and evaluate risks to owner occupied real estate, income producing properties and commercial loans secured by real estate.
Evaluate real estate loan repayment sources.
Construct a basic income property cash flow.
Understand basic appraisal concepts and requirements.
The course is designed for:
Commercial
loan officers
Private
bankers
Junior
commercial real estate lenders
and other banking professionals who need to understand
the basic concepts of commercial real estate lending.
Requirements:
Prior knowledge is helpful, but not mandatory
PC/Laptop/Tab/Smartphone with internet access
Course Structure
The Fundamentals of Commercial Real Estate Program is composed of five modules and a final assessment.
Course Outline
The course is broken into five modules with a final assessment at the end of the program:
Module 1. Understanding Real Estate Lending Risks
Module 2. Loan Types
Module 3. Underwriting Fundamentals
Module 4. Financing Different Property Types
Module 5. Appraisals Final Assessment
Course Format
Each module begins with a set of learning objectives indicating the basic skills and information the students will acquire from that module. There is a case study to help apply the concepts learned.
Recommended Program of Study
It takes approximately 5 to 6 hours to complete the entire program. Students can proceed at their own pace to complete the course. Students have six months to complete the entire online Fundamentals of Commercial Real Estate Course. Listed below is a recommended course of study to complete the entire program within a six-week time span. Modules can be studied more than one time. The final assessment should only be taken when the students feel he/she has mastered the material.
Week 1. Understanding Real Estate Lending Risks
Week 2. Loan Types
Week 3. Underwriting Fundamentals
Week 4. Financing Different Property Types
Week 5. Appraisals
Week 6. Final Assessment
Specific Course Topics
Module 1. Understanding Real Estate Lending Risks In this module you will learn to:
Identify the risk common to all commercial real estate loans.
Outline strategies lenders can adopt to mitigate commercial real estate lending credit risks.
Module 2. Loan Types In this module, you will learn to review the general characteristics of:
Construction Loans
Income Property Loans
Owner Occupied Commercial Real Estate Loans
Commercial Loan Secured by Real Estate
Module 3. Underwriting Fundamentals In this module you will learn to:
State the regulatory considerations that affect underwriting guidelines.
Describe key elements in underwriting and structuring a construction real estate loan.
Understand key elements to determine the amount of the loan including: Net operating income (NOI), Debt service coverage ratio (DSCR), Loan to value (LTV), and Debt yield.
Identify and understand the components of income property real estate underwriting, including Property types (A, B, and C), lease income, vacancy factors, operating expenses, net operating income and capitalization rates.
Construct a basic income property cash flow.
Module 4. Financing Different Property Types In this module, you will learn to identify the general features and underwriting characteristics of:
Apartment buildings
Office buildings
Industrial and warehouse properties
Retail Properties
Special-purpose properties include: elderly care, hotels, restaurants and self-storage
Facilities
Module 5. Appraisals In this module you will learn to explain:
The purpose of an appraisal
Why appraisals are important to the underwriting process
When appraisals are required and not required
The three approaches to value
The different types of appraisal reports
Fundamentals of Commercial Real Estate Lending
The Fundamentals of Commercial Real Estate Lending objective is to provide bankers with a basic understanding of commercial real estate lending concepts and techniques.