Global Real Estate: Transaction Tools
Course Credits: Counts towards the CIPS Designation
Duration: 1 Day
Format: Classroom, Online
Any international real estate transaction, whether it involves the purchase of a home, a useroccupied
business facility or an income-producing property is considered an investment. The
purchaser or lessee typically commits a substantial amount of cash in their own currency to carry
out a transaction in a foreign currency.
If the international investor has money on deposit in the currency of the country where the
investment is being made, there will eventually be some kind of exchange transaction. There is
always the possibility that money will be made or lost based on the currency exchange dynamics
alone. For that reason, it is important to be familiar with the mathematical and financial skills
presented in this course.
Domestic residential brokers and salespeople are accustomed to presenting homes as
investments in terms of appreciation and tax sheltering. Many real estate professionals are
not familiar with how to determine, discuss and present an investment analysis of a property.
This course examines how customary real estate practices need to be modified when working
with international clients or properties.
In some ways, a real estate transaction involving international clients or properties is similar
to a domestic transaction.
Overview
The International Real Estate for Local Markets course introduced the international real estate
market, including conditions and practices around the world. This course builds upon that
knowledge by providing:
- Basic preparation requirements for the international client.
- Financial concepts such as capitalization rate and cash-on-cash return.
- Legal and tax issues
- The importance of incorporating a team of professionals
Case studies are used to present the course material. There are three cases which follow a
progression of increasing complexity.
Course Objective
During this course students will learn how to:
- Recall fundamental
terminology
- Discuss strengthening and
weakening currencies
- Review globalization,
capital flow and currency
conversions
- Identify six steps in
preparing for an
international transaction
- Discuss differences between
types of residency status
- Discuss ownership options
- Review basic income tax
liability laws for non-resident
aliens
- Identify components
of HP-10BII to be used in
case studies
- Discuss calculator
default settings
- Set necessary function modes
to successfully complete
course case studies
- Review 6-Step International
Transaction Preparation
Process
- Apply 6-Step process to
Mr. Chen's case study
- Complete calculation
necessary to answer
Mr. Chen's questions
- Calculate the financial
problems associated
with investing
- Apply financial concepts
to the case study
- Identify the effects of exchange
rate fluctuations on
a transaction
- Obtain the skills needed for
basic financial analysis
- Apply six step preparation
process to Dr. Garcia's
case study
- Calculate steps to achieve the
5-year projection of rents
- Calculate the capitalization
rate for each of the 5 years
- Measure yield using the IRR
- Calculate the potential effect
taxes have on a real estate
investor's return
- Recognize the need to develop
a team of legal and tax experts
- Analyze potential before-tax,
cash-on-cash return
- Project sales proceeds
- Estimate the internal rate of
return (IRR)
- Evaluate the effects of
fluctuations in currency value
on the IRR
- Utilize an annual property
operating data (APOD) form
and an international cash flow
analysis worksheet to
organize data for calculations.
