Lecture 1: Real Estate Process Overview - Dr. James R. DeLisle
Lecture 1: Real Estate Process Overview - Dr. James R. DeLisle
Lecture 1: Real Estate Process Overview - Dr. James R. DeLisle
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Risk Management and <strong>Real</strong> <strong>Estate</strong><br />
© JR <strong>DeLisle</strong>, Ph. D.<br />
• Risk Scenarios<br />
• Situation: Buying Property<br />
• Case A. Predict rents rise to $30/sf; only hit $20.<br />
• Case B. Predict rents rise to $20/sf; actually, hit $30<br />
• Which is Risk? A, B, A & B, None of above?<br />
• Definition of Risk<br />
potential variation between expectations and realizations<br />
• Causes of Risk<br />
– Inadequate information<br />
– Inaccurate data<br />
– Invalid predictive model<br />
– Unforeseen change in environment<br />
– Other externalities<br />
<strong>Real</strong> <strong>Estate</strong> <strong>Process</strong>
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