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Learn it. Try it. Make a decision.

Underwrite your first property.

A good property analysis separates the building’s economics from the financing. Start with rent and expenses, test the price, and explain what could go wrong before presenting a recommendation.

Start my four-step path →Browse all resources

Devon Coombs, CPA, MBAAssistant Teaching Professor of Finance and Faculty Director of Real Estate Finance, Santa Clara University

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Up next: Learn what an underwriter is trying to decide

Check off a task after you have tried it. Progress saves in this browser when storage is available; this is a personal checklist, not a course grade or certificate.

  1. Free courses · 10-minute starter activity

    Learn what an underwriter is trying to decide

    Begin the first lesson. List the property, the business plan, the investor, and the decision. Identify which facts you have and which inputs are still estimates.

    Real Estate Finance

  2. Calculators · 10-minute starter activity

    Build the operating picture

    Enter hypothetical income and operating expenses. Identify what reduces NOI and why financing is analyzed separately. Change vacancy or expenses and observe the result.

    NOI, OER & Cap Rate

  3. Practical guides · 10-minute starter activity

    Check ownership costs before relying on a budget

    Read the assessment and tax-bill distinctions. List property taxes, insurance, maintenance, and reserves you would verify for the actual property; do not copy the seller’s costs blindly.

    California property tax for a new homebuyer

  4. Practical guides · 15-minute starter activity

    Present a decision, including the downside

    Use the worked example to identify uses of funds, debt, equity, and downside assumptions. Draft a recommendation with one condition that must be satisfied before proceeding.

    Real estate investment committee presentation: outline and example

A fictional example · Check your understanding

A small cap-rate change can move the price

In a simplified direct-capitalization example, $120,000 of stabilized annual NOI at a 6% cap rate implies a $2 million value. At 7%, the same NOI implies about $1.714 million. This calculation excludes debt and is not a full appraisal.

Does a higher cap rate mean a higher value when NOI stays the same?

No. Value equals NOI divided by the cap rate in this model. Increasing the denominator reduces value. Verify comparable transactions, expected income, and property-specific risks before using an assumed rate.

Questions to ask along the way.

How do I start learning commercial real estate underwriting?

Begin with the rent roll, vacancy, operating expenses, and NOI. Then examine price, capital needs, debt terms, and equity cash flows. Compare a base case with a downside case and explain the assumptions that drive each.

Is NOI the same as cash flow to an investor?

No. NOI describes property operations before financing and income taxes. Debt service, capital expenditures, reserves, ownership structure, and other adjustments affect the cash that can reach an investor.

Where can SCU students explore real estate careers?

Use the student career guide for the Real Estate Institute, campus organizations, relevant software, credentials, and Bay Area career paths. Follow its official organization links for current events and membership details.