Welcome to Investment Real Estate Analysis
for the Sophisticated Investor - Part I



I am happy to announce the date, time and location of the first four-hour Investment Real Estate Analysis course of its kind to ever be held in Chico.


Please call 530-893-5533 for the day, time and location of next Investment Real Estate Analysis course.

Course Description (Part I):

This four-hour course is an introduction to powerful yet practical analytical techniques (methods) and concepts necessary for success in today's fast-paced marketplace. These methods will provide you with an objective basis for making vital investment real estate pricing (valuing) decisions. Basing your investment real estate decisions on objective methods will reduce your investment risk and make you more money. It will help take the "guessing" and "gut feeling" out of your investment real estate decision making.

You will receive a 45-page handout that includes explanations of all course concepts and approximately 30 example problems illustrating them. The course handout will be invaluable to you both during and after the course. If you do not understand something, you will be able to clear it up in class or at home by reading the 45-page handout. Many of the course concepts will apply to most types of investments.

As far as I know, a course like this one has never been offered in Chico. Except in San Francisco through a commercial-investment real estate affiliate of the National Association of Realtors, I am not aware of a course of this kind to ever be offered in Northern California. They charge $1,090 ($218/day) for their 5-day course and that does not consider the cost of hotel, food and travel to and from the Bay Area. I completed five of their 5-day commercial-investment real estate courses all in San Francisco (www.ccim.com). They allow approximately one and a half days to cover the same key concepts that we will cover in only four hours. This course will move at a brisk pace.

C.P.A.'s and certified financial planners have said this four-hour course was the best investment real estate analysis course they had ever attended.

Course Objectives:

  • Learn how to analyze and evaluate a single real estate investment.

  • Learn how to compare one real estate investment with another.

  • Maximize future wealth by using objective methods rather than a "gut feeling" to make investment real estate decisions. Asset Management.

  • Network with quality real estate investors. In my opinion, the quality of the real estate investor has more to do with one's positive attitude than their net worth.

  • Have fun! Buying and selling investment real estate is the real-life game of Monopoly.

Course Concepts:

  • pros, cons and dual purpose in using various methods/ratios to analyze and evaluate investment real estate
  • converting all cash flows from an investment to a measurement of performance or investment value
  • primary basis for determining value of income-producing property
  • differences between investment value & appraised value
  • including a premium for risk in the discount rate
  • forecasting cash flows before tax (CFBT)
  • annual property operating data (APOD) worksheet
  • cash flow analysis worksheet
  • alternative cash sales worksheet
  • return of & return on investment
  • gross rent multiplier (GRM)
  • internal rate of return (IRR)
  • investor's yield requirement
  • highest & best use (HABU)
  • reserves for replacement
  • net present value (NPV)
  • time value of money
  • capital expenditures
  • operating expenses
  • annual debt service
  • initial investment
  • cash-on-cash rate
  • opportunity cost
  • lease analysis
  • compounding
  • due diligence
  • discount rate
  • sinking fund
  • discounting
  • gross lease
  • net lease
  • cap rate
  • yield

If this is your first exposure to these concepts, you may find the course moving too quickly. If so, do not expect to master these concepts after only four hours. At a minimum, you will walk away from this course with a much-improved ability to communicate with sophisticated investors and other investment real estate professionals.

The HP-10B or HP-10BII Financial Calculator is Strongly Recommended:

To illustrate course concepts, we will solve approximately 30 financial and investment real estate problems using the HP-10B or 10BII financial calculator. No other calculator will be supported in this course. While solving class problems, I will describe in detail the proper HP calculator keystrokes, but because of the limited amount of time and the volume of material that needs to be covered, often I will do so only one time and then move on to the next problem.

The HP-10BII is not as difficult as it may first appear. We will use less than 10% of the keys. What you do not learn in class you can learn at home from the HP-10BII owner's manual and 45-page handout. The more familiar you are with the HP-10BII the more energy that you can devote to learning course concepts instead of basic HP-10BII keystrokes.

Even though it is strongly recommended that you bring an HP-10BII calculator and understand the basic keystrokes to solve loan, cash flow, and time value of money (TVM) problems, do not let a lack of confidence in its use stop you from attending. You will receive a wealth of information on how to analyze a real estate investment even if you do not know how to operate the HP-10BII.

Please refer to the HP owner's manual for an explanation of the proper keystrokes for solving loan, cash flow, and time value of money (TVM) problems. For purposes of solving course problems, the keystrokes for the HP-10B and 10BII are the same.

The last time I checked, Office Depot, Office Max and CSUC bookstore offered the HP-10BII calculator (includes owner's manual). First call to make sure they have it in stock.

Course problems requiring the HP-10B or 10BII calculator include solving for the following:

  • price to pay to achieve a certain yield
  • borrower's effective interest rate
  • points to achieve a certain yield
  • internal rate of return (IRR)
  • loan amortization schedule
  • net present value (NPV)
  • periodic payment
  • present value (PV)
  • future value (FV)
  • loan balances
  • interest rate
  • loan terms
  • yield

Course Description (Part II):

Another four-hour course (Part II) will be offered after a sufficient number have completed Part I. Part II will introduce new concepts as well as expand upon those introduced in this course (Part I). To demonstrate the analytical techniques, concepts and cash flow worksheets introduced in Parts I and II, we will work several case studies analyzing hypothetical real estate investments. Part II will be offered only to those who complete Part I and follow course rules of conduct (see below).

How to Register for the Course:

To register, please mail the following to David M. Hector, P.O. Box 331 Chico, CA 95927:

1.The name(s) of the person(s) who will attend. A photo ID is required for admittance.
2.The date you plan to attend.

A check made payable to David M. Hector in the following amount:

  • $49 per person if your check is received before the fifth calendar day prior to the course. If your $49 check is received during this time, we can mail you a copy of the 45-page handout to reveiw prior to the course for an additional $2.
  • $54 per person if your check is received on or after the fifth calendar day prior to the course but not on the day of the course.
  • $59 per person on the day of the course.

    There is a 10% (15%) discount for groups of three (four or more) paid by one check.

    Your course fee will be refunded to you out of future commissions received by my office as a result of representing you in the sale or purchase of property. This course is free to those who currently have property exclusively listed with me. The value of this course is easily $125. Seating is limited. Dress is casual.

4.Your address to receive a possible registration fee refund or invitation to Part II. If in the unlikely event I must cancel a course, there will be a message on my answering machine as well as the first syllabus page of my website www.davidhector.com to that effect by 12:00 noon on the day prior to the course, and your registration fee will be fully refunded. Otherwise the registration fee is non-refundable. Please provide your e-mail address, fax number and phone number so my office can quickly communicate with you if necessary.

Since your address will probably be preprinted on your check, there should be sufficient room on the bottom left memo section of your check to neatly print the names of those who will be attending and the date they plan to attend. If there is not enough room on your check for this information, please write it on a separate piece of paper and mail it with your check.

This course is currently not available to local real estate agents and their family members. I reserve the right to make an exception or refuse any registration request.

If you would like me to speak to your group, please call my office for rates.

Course Instructor: David M. Hector

I graduated from California State University at Chico in 1976 with a Bachelor of Science in Accounting. I soon thereafter passed the CPA examination and worked for several CPA firms. In 1980, I obtained my real estate license. In 1983, I obtained my broker license. Since then I have been an independent real estate broker specializing in Chico investment real estate.

I successfully completed the following intensive graduate-level curriculum through a commercial-investment real estate affiliate of the National Association of Realtors. Each 40-hour course elevated my understanding of investment real estate analysis to a much higher level. This curriculum is recognized for its pre-eminence within the commercial-investment real estate industry:

  • CI101- Fundamentals of Real Estate Investment and Taxation
  • CI102- Fundamentals of Location and Market Analysis
  • CI103- Advanced Real Estate Taxation & Marketing Tools for Investment Real Estate
  • CI104- The Impact of Human Behavior on Commercial-Investment Decision Making
  • CI301- Decision Analysis for Commercial Real Estate

As a practitioner with 25 years of Chico investment real estate brokerage experience, I possess an excellent working knowledge of the methods and concepts to be presented in this course.

Contact Information:

E-mail: dh@davidhector.com
Fax: 530-893-5575
Office: 530-893-5533

Website: www.davidhector.com
Mailing Address: P.O. Box 331
Chico, CA 95927

All or nearly all of your pre-course questions will be answered by a thorough reading of this syllabus. If you still have questions feel free to contact me. E-mail or fax is preferred.

Course Rules of Conduct:

Because of the volume of material and the limited amount of time to present it, I will not be able to answer as many questions, be as interactive or spend as much time on concepts as some would like.

In order to run the course more efficiently, please limit your questions to those directly related to the course concepts. Those who give the courtesy of raising their hands will receive priority. Please first try to answer your own questions by reading the handout. If you still have a question please ask when appropriate.

The classroom is a non-smoking environment. Please leave your cell phones and pagers in your car or turn them off during the course. For everyone's benefit, please keep talking to a minimum while I am speaking. Feel free to discuss course problems and concepts with your neighbor but please keep volume down.

Most do not need to be told this, but any inappropriate behavior that interferes with my ability to present the course material may result in the offender being asked to leave the room, forfeiting the registration fee. This friendly reminder will help ensure everyone a more positive experience. Thank you for understanding.

Enjoy the course,

David M. Hector


David M. Hector
Real Estate Brokerage
DRE # 00796981
Office: (530) 893-5533
Fax: (530) 893-5575

Toll Free: (800) 898-5568
Email: dh@davidhector.com

© 2003-2009 David M. Hector