Real Estate: Investment and Financial Strategy

1. Front Matter

   Pages i-xi

   PDF

2. Introduction

   1. Introduction

      • Peter Chinloy

      Pages 1-9

3. Valuation

   1. Front Matter

      Pages 11-11

      PDF

   2. Real Estate—Institutional and Legal Environment

      • Peter Chinloy

      Pages 13-24

   3. Valuation and Appraisal of Properties

      • Peter Chinloy

      Pages 25-47

4. Financing

   1. Front Matter

      Pages 49-49

      PDF

   2. Interest Rates, Financing, and Mortgage Multipliers

      • Peter Chinloy

      Pages 51-67

   3. Fixed Rate and Payment Mortgage (FRPM)

      • Peter Chinloy

      Pages 69-86

   4. Inflation and Interest Rate Risks: Variable Interest Rate and Payment Mortgages

      • Peter Chinloy

      Pages 87-116

5. Real Estate Investment: Holding Physical Assets and Properties

   1. Front Matter

      Pages 117-117

      PDF

   2. Active Investment in Real Estate: Residential Owner Occupancy

      • Peter Chinloy

      Pages 119-145

   3. Active Real Estate Investments: Holding Strategy

      • Peter Chinloy

      Pages 147-185

6. Real Estate Investment: Holding Financial Assets

   1. Front Matter

      Pages 187-187

      PDF

   2. Passive Investment: Syndication, Limited Partnerships, and Real Estate Investment Trusts

      • Peter Chinloy

      Pages 189-210

   3. Mortgage Securities

      • Peter Chinloy

      Pages 211-257

   4. Mortgages and Mortgage Security Hedging

      • Peter Chinloy

      Pages 259-289

   5. Mortgage Banking: Direct Lenders

      • Peter Chinloy

      Pages 291-310

7. Back Matter

   Pages 310-315

   PDF

This book has evolved from an interest in formalizing theories of real es­ tate financing and investment. While real estate has characteristics of illi­ quidity and heterogeneity, recent developments have created markets for financial claims on property assets. These financial claims render real es­ tate similar to other assets. These financial claims render real estate similar to other assets. Yet real estate markets retain degrees of ineffi­ ciency, suggesting possibilities for arbitrage opportunities. Such possi­ bilities are examined in the book. If sellers are prohibited by statute from transferring existing financing to buyers, they tend to hold properties longer when contract interest rates on loans exceed those prevailing in the market. Methods are required to account for and measure the quantity of mortgage equity arising from such favorable financing. Holders of mortgage backed securities face risks on both sides of interest rate movements. Should interest rates fall, debtors refinance. If interest rates rise, debtors do not refinance, and the holders of mortgage backed securities suffer capital losses. Hedging strategies are re­ quired. Mortgage warrants and option pricing mechanisms are discussed, and various equity unlocking mechanisms, such as collateralized mort­ gage obligations.

• Banking
• Financing
• Hedging
• Investment
• Real Estate
• Real Estate Investment
• Real Estate Investment Trust

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