“I Can Calculate The Motions Of Heavenly Bodies, But Not The Madness Of People”
Isaac Newton - in relation to the South Sea Company bubble
Real Estate Appraisal
I love the above quote, it serves as a reminder that no matter how hot you are with numbers, there is always more to the game than meets the eye. I have met and worked with people with PhDs in advanced fields such as physics, and while their mathematics was flawless, their fundamental knowledge of Real Estate was poor which lead to a raised eyebrow or two during presentations.
Real Estate appraisal is not heavy on math, you do not need to have been the best in class at calculus to succeed in this field. I consider it more of a game of Sudoku, yes there are numbers involved…but you simply need to be able to count to 9 to play the game. It does not take any real knowledge of advanced arithmetic to complete; some would say it is an art while others may call it a language.
Who knows, maybe some day in the future analysts will be taking a more advanced approach to the numbers involved in RE appraisal. Some people in industry I have spoken to have already worked on more stochastic approaches such as Monte Carlo simulations just to challenge themselves…I’d be lying if I said I didn’t attempt it myself, but I think we are quite a way off the industry accepting something like this.
Welcome to BTRI's Appraisal Bootcamp
This course was created with the idea of teaching others the techniques involved in creating the perfect cash flow to present to either investors, management, fund admins or even help you pass that interview modelling test that you are stressing out so much about.
While models are free to download and use, I encourage you to try and build your own, it is more about taking away the techniques, the formulas and the approach to modelling and creating your own idea of how things should be done. Think of it as a springboard into the world of RE appraisal.
While this site focusses entirely on BTR the lessons learnt can be applied to most areas of RE. As someone who had very limited access to resources starting out I know something like this would have been a great help instead of spending hours scouring the net looking for basic formulas to get my models to do what I wanted them to do (Adventures in CRE wasn’t really a thing back then…or if it was, it was certainly well hidden!).
