Florida 14 hours Fundamentals of Commercial Real Estate course.

Approved by the Florida Department of Business and Professional Regulation

This course is written for real estate brokers and sales agents who are interested in exploring the possibility of entering the practice of commercial real estate or for those that are new to the practice of commercial real estate and need some additional basic information. In addition, we realize that there are experienced commercial agents or brokers who want to obtain their continuing education credits in the area of commercial real estate. This course also contains some interesting case studies.

Continuing Education is required for both active and inactive Florida real estate brokers and sales associate. Active or inactive brokers or sales associates must take a 14-hour continuing education course during each 2-year license period. The course must contain 3 hours of core law and 11 hours of "specialty" topics that focus on real estate issues relevant to Florida Statute, Chapter 475. This course meets the prescribed 14 hours of continuing education.

Florida Real Estate License Law Update

Learning objectives for the licensee:

• Understand the recent law changes enacted by the Florida Real Estate Commission.
• Learn the process of becoming a real estate practitioner.
• Explain the qualifications required to practice real estate.
• Explain the steps a licensee must take to renew their license.
• Know the difference between an active license and a voluntarily inactive license.
• Audits and inspections, understand why the Department of Business Professional Relation requires them and how to be in compliance.
• Know what is required of nonresident licensees and what states Florida has a mutual recognition agreements.

Registration and Licensing Requirements

Learning objectives for the licensee:

• Learn about the real estate recovery fund and why it was created.
• Discuss the duties of a designated sales associate.
• Discuss the duties of a designated salesperson.
• Explain what the guidelines a broker must apply while maintaining an escrow account.
• Understand interest bearing escrow accounts and the types of disbursement methods that are allowed.
• Learn the other important areas of real estate knowledge.

Other State and Federal Laws

Learning objectives for the licensee:

• Understand the Florida Vacation Plan and Timesharing Act.
• What disclosure is required in a residential rental agreement.
• Explain the landlord's and tenant's obligation to maintain the premises.
• Explain the brokerage relationship disclosure act and the required disclosures.
• Explain the "Bert J. Harris, Jr., Private Property Rights Protection Act" and why it was created.
• Learn the other state and federal laws.

Violations and Penalties

Learning objectives for the licensee:

• Explain the range of penalties, from lowest to highest, are available to the Florida Real Estate Commission.
• Explain how can a respondent object to a violation.
• Understand what is a citation is and to whom can it be issued against.
• Name 6 violations that constitute grounds for Notice of Noncompliance.

Commercial and Investment Real Estate Compared to Personal Use Real Estate

Topics covered in this chapter include an introduction to commercial and investment real estate, a comparison of investment real estate with personal use real estate. There is also a discussion of the real estate market place and how real estate operates in an imperfect market. Learning objectives for the licensee include:

• Know the differences between commercial and investment real estate practice.
• Understand the nature of the commercial and investment real estate market.
• Explain the difference between a perfect market and how commercial and investment real estate works in an imperfect market

Types of Properties and the Basis of Demand for Each Type of Property

Topics covered in this chapter are the four major property types the broker or agent encounters in the practice of commercial and investment real estate: multi-family, office, retail and industrial. For each property type there is a discussion of the common property descriptions, ownership characteristics, and classifications within each property type. Included are references to various Iindustry rating systems. Learning objectives for the licensee include:

• Identify the major property type groups that make up the commercial and investment real estate industry.
• Know the different characteristics of the properties found in each major property group.

Price and Value in Commercial and Investment Real Estate

Topics covered in this chapter are the difference between the term “price” and the term “value”, sources of value in for commercial and investment real estate, and the use of appraisals in commercial and investment real estate. Additionally, there is material on the three approaches to determining value used in commercial and investment real estate appraisals along with a discussion of the theory of highest and best use. Learning objectives for the licensee include:

• Identify the difference between the term price and value as found in the commercial and investment real estate market.
• Learn the common definitions used in the discussion of price and value found in the commercial and investment real estate market.
• Learn the components of an appraisal used in the commercial and investment real estate market.
• Understand the effect of supply and demand on the commercial and investment real estate market.

An Agent's Activities in Commercial and Investment Real Estate

Topics covered in this chapter include an overview of the common agent activities found in the commercial and investment real estate market place. Leasing, brokerage, development and financing are covered. There is also a discussion of the necessity of an agent specializing in one of the brokerage activities within one of the four major product types. Learning objectives for the licensee include:

• Be able to explain the different activities in which a commercial and investment real estate agent may become involved.
• Know the characteristics of real estate investing.
• Identify what an investor is looking for in a real estate investment.

Understanding an Investment in Commercial and Investment Real Estate

Topics to be covered in this chapter include "investment in general", "characteristics of investment", "financial factors in real estate investments", "the cash flow model", "rules of thumb found in the market place" and "characteristics of investors' behavior". Learning objectives for the licensee include:

• The characteristics of an investment
• The financial factors in real estate investments
• The cash flow model
• The calculator financial keys
• The characteristics of investors' behavior

Common Financial Rules of Thumb Found in Commercial and Investment Real Estate

Topics in the chapter include a discussion of the common rules of thumb found in the practice of commercial and investment real estate including cost per square foot, gross rent multiplier, capitalization rate, and the cash on cash return. The strengths and weakness of each rule of thumb are discussed. Learning objectives for the licensee include:

• Learn the rules of thumb commonly used by investors in the commercial and investment real estate marketplace.
• Be able to calculate the rules of thumb commonly used by investors in the commercial and investment real estate marketplace.

Forms of Group Ownership in Commercial and Investment Real Estate

Topics include a discussion of the benefits of group ownership compared to individual ownership and the common legal entities encountered in the ownership of commercial and investment real estate including limited partnerships, limited liability companies (LLC). In addition there is a thorough discussion of federal securities laws and various exemptions available in commercial and investment real estate investment groups. Learning objectives for the licensee include:

• Define the different ownership forms found in the commercial and investment real estate marketplace.
• Learn the difference between a General Partnership and a Limited Partnership.
• Become familiar with use of Limited Liability Companies (LLCs) in commercial and investment real estate.
• Recognize when the security rules apply to commercial and investment real estate.

Financing Concepts in Commercial and Investment Real Estate

Topics to be covered in this chapter include an introduction to financing in commercial and investment real estate and the types of loans found in the marketplace. Lender rules of thumb, such as loan to value, debt coverage ratio and loan constant are covered and calculated along with a thorough discussion of the concept of financial leverage, including positive, negative and neutral leverage. Learning objectives for the licensee include:

• Define the types of loans available in the commercial and investment real estate marketplace.
• Learn common lender terminology that applies to commercial and investment real estate.
• Understand the concept of leverage.
• Be able to calculate the rules of thumb lenders use in the commercial and investment real estate marketplace.

Before Tax Cash Flow Analysis in Commercial and Investment Real Estate

In this chapter three basic forms used to evaluate an investment in commercial and investment real estate are introduced. The Annual Property Income form, the Multi-Year Cash flow Form and the Sales Proceeds are introduced and used by the student to complete a multi year before tax cash flow analysis of an investment property in a the Emily Bridger case study. Learning objectives for the licensee include:

• Understand and use the Annual property Income form.
• Understand and use the Multi-year Cash Flow form.
• Understand and use the Sales Proceeds form
• Apply the three forms to an actual case study.

What Comes Next?

Here we take the student back to a discussion of the three levels of involvement available to them in this field. We tell the student that if they want to be a full time participant in this field they will need to add the skills of Time Value of Money and Taxation. We point them in the right direction to find the sources of the additional education they will need to serve their clients well or to serve their own investment needs.