The first book by an Indian author giving in-depth financial analysis for realty investments

Real Estate Investment and Financial Analysis (REIFA): A comprehensive manual

"Real Estate Investment & Financial Analysis: The Four Essentials of Building Wealth with Realty", made it to BookAuthority's Best Books of All Time.

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View some articles and write-ups on real estate finance
Write-up 1. Linkage of real estate assets and capital markets
Write-up 2. The basic concept and use of financing- aggregation and segregation of money
Write-up 3. Real Estate Education in India: Need and Importance 




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TABLE OF CONTENTS: EXTRACTS (in four parts as below)

1^ST PART: INTRODUCTION; INVESTMENT BASICS (FOUNDATION FOR REALTY INVESTING): Meaning of Real Estate and Realty Investment; Real Estate as an Asset Class; Real Estate Investment Basics. Consumption View vs. Investment View, Secondary Use Investment Goals, Caveats, Strategies and Investing Styles, Combining Leverage, Portfolios, Wealth Management, Financial Planning, Investment Planning, Wealth Preservation, Comparison to Other Asset Classes, Inflation and Hedging; Tools for Real Estate Investment Study Mathematics for Real Estate Investment Analysis, TVM, Misc Financial Tools

2^nd PART: REAL ESTATE INVESTMENT ANALYSIS (METHODOLOGY): Macro Approach to Realty Investing , Study of Cycles, Economic Cycle, Real Estate Cycle, Construction Activity and Cycles, Geographical Factors, Localities and the Value Forces, Globalization impact; Realty Indices: Prevalent Indices based on their Origins, The Pros and Cons of Different Indices, Real Estate Indices in India, Private Indices, sentiment index; Understanding Returns & Risk in Real Estate, Rental Concepts Prevalent, Evaluating Returns with NPVs, IRRs and more; Evaluation of Risk, Net Effective Rent, Risks in Real Estate, Statistical Tools for Risk-Return Study. Valuation of Properties, Guiding Principles, Value forces, Highest & Best use, methods- DCF, capitalization, comparison, cost, reconciling

3^rd PART: FINANCING THE INVESTMENT(FUNDAMENTALS): Financing Real Estate Investments and the Eight Tenet Matrix of Real Estate Finance; Equity Investment: Direct Equity Investment, Risk & Return, Pooled Equity Investments;  Debt Investment, debt evaluation with LTV and DSCR, leverage concept, mortgages and various loan structures possible, mezzanine finance, LAP, LRDs, balloon loans, CLSS scheme.

4^th PART: FINANCING REAL ESTATE THROUGH POOLED INVESTMENTS: (CONCEPTS, INVESTMENT VEHICLES AND ANALYSIS): Securitization, Securitization Process; Types, Residential and commercial Mortgage Backed Securities (RMBS and CMBS), CMOs, mortgage pools and assessments, REITs overview, classification, investment strategies and aims, objectives of REITs. REITs and InvITs in India, REMFs, CIS, VCs, AIFs, foreign funds in real estate, discussions on REITs in India; REITs Analysis and Valuation – methods, Portfolio Analysis, Risk Return Analysis, Valuation of REIT Stocks, Real estate cash flow modelling

Notable Comments:

This is the first book by an Indian author giving in-depth financial analysis for realty investments. A unique feature of this book is the interesting linkage of financial concepts with real estate asset analysis. This approach helps in a thorough study of real estate, an extremely important asset class for everyone.

-Mr. Deepak Jain, Country Head, India and South Asia, American Academy of Financial Management

As the capital markets deepen their relationship with real estate, the importance of such a structured study cannot be undermined. It will be very helpful to all investors and market participants, especially with the arrival of an era of financial inclusion for real estate investing.

-Mr. G C Sharma, Head-Financial Education, Schools & Universities, National Stock Exchange of India (NSE)

The author has an interesting way of explaining finance concepts with the help of diagrams and pictures. A much needed book on the subject.

-Mr. Ruchir Sharma, author of ‘Breakout Nations’ and ‘Rise and Fall of Nations’; Chief Global Strategist & Head Emerging Markets, Morgan Stanley Investment Management

Savvy investors look beyond the evident. 

(Diversifying investments, discovering potential growth assets and learning continually are a part of their strategic wisdom)

This book comes at a crucial time, when the need to understand real estate as an asset class is being widely felt. It analyzes real estate investments and related financial aspects methodically, in the same manner that we carry out study of other assets such as equity, fixed income instruments, and currency. If you are a student of finance, an investor, a money manager, wealth manager or someone who is just curious about real estate from the viewpoint of investment and finance, you now have an in-dispensable tool in the form of this book.

Book Description

Real Estate is not everyone’s piece of cake. Or can it be? Real estate investing can generate good returns, act as an effective hedge against inflation, and be useful for diversification. But we often wonder if the ‘not-so-wealthy’ have any way to gain by participating in this form of investment or if it is just a dream. 

In order to understand this, we can look at the life of humans and draw some comparisons. Asset investing, like humans, gains maturity over time - the asset market evolves, gathers more wisdom, and associates more people with it as time progresses. Being equity share-holders, many of us are already fractional owners of some of the biggest manufacturing companies in the world.  Would this have been possible more than 50 years ago? At that time, being an owner of a manufacturing unit meant putting up a factory and assembling all factors of production. Now, the investment avenues are well developed and the whole ecosystem makes this process not only better but also more inclusive to all.

This change in stock markets was brought about by a change in the framework at a very fundamental level in each such stock market in the world. Indian markets welcomed this era in the 1980s and the process gained tremendous momentum with advent of SEBI in 1992. Participation in industrial growth of the nation became an opportunity for everybody and gradually the rest of the world participated with India. The real estate industry is also set to alter dramatically and in a similar way. At a global level, we see this already- the real estate sector is the first new headline sector added since GICS® created in 1999 (by MSCI and Standard & Poor's for use by the global financial community) - it became the 11th sector in 2016. In India too, the new environment is now in place- RERA, REITs and the frameworks in India are now conducive to this transformation. Real estate investing is set to undergo a seachange and we can all benefit by being pro-active in this transition.

However, real estate investing is more complex and different from other investments. It has a certain pattern of returns, unique characteristics and many other nuances. The mortgage crisis of 2008 proved that even if we invest indirectly through various financial instruments and investment vehicles, the asset’s nature & behavior have a strong bearing on the way our investment functions. Thus, a person can buy ‘real estate’ or buy a ‘piece of the real estate pie’ (just like ‘owning a factory’ or ‘some equity’ in it), but the characteristics of real estate make investing herein quite different from other assets.

This book takes the readers through a journey of learning, one step at a time. It shows how real estate can be used efficiently by investors - both big and small- for wealth generation and financial growth. Plenty of examples, diagrammatic explanations and numerically worked out problems (with solutions) make it a truly knowledge enriching experience. We can therefore, start the learning process in order to ’have the cake, and eat it too!’

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