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MODULE E

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MODULE E

    ST“WEALTH BUILDING IN THE 21 CENTURY”

    2006 SIOR

    FALL PROFESSIONAL CONFERENCE

    CHARLOTTE, NC

Presented By:

    Mr. Robert J. Nahigian, FRICS, SIOR, CRE Auburndale Realty Co.

    P.O. Box 66125

    335 Auburn Street

    Newton, Massachusetts 02466

Tele: 617-332-6900

    Fax: 617-965-2570

    E-Mail: Rob@siorcre.com

    www.siorcre.com 2006

Any reproduction or use of this material without the expressed written consent of Robert J. Nahigian or his legal counsel is

    strictly prohibited.

page 2

    STATEMENT OF QUALIFICATIONS

ROBERT J. NAHIGIAN, FRICS, SIOR, CRE

    Auburndale Realty Company

    P.O. Box 66125

    335 Auburn Street

    Newton, Mass. 02466

    6l7-332-6900

    Real Estate Career: Robert J. Nahigian, FRICS, SIOR, CRE has thirty-four years of real estate

    experience with twenty-six years exclusively in commercial and industrial

    as a developer, advisor, expert witness and broker of approximately $4.5

    billion of real estate totaling 35 million square feet. He is recognized as a

    national leader in his industry; a frequent speaker; and invited columnist to

    newspapers.

    Real Estate Specialty: Advisory/Counseling, Commercial Sales, Leasing, Court Testimony,

    Build-to-Suits & Corporate Representation

    Professional

    Experience: Mr. Nahigian is Principal of Auburndale Realty Co. He provides

    brokerage/advisory and expert testimony services to public agencies,

    investment portfolio groups and corporations in New England, Missouri,

    Ohio, California and Florida. He has been appointed to the Mass. Highway

    Real Estate Valuation Review Board by Gov. Romney.

    Client List: Rob has held assignments with such notable entities as AT&T, Warren

    Buffet‟s Berkshire Hathaway Real Estate Group, Archdiocese of Boston,

    Goldman, Sachs/Archon Group, MassDevelopment, Rizzo Associates,

    Ryder Dedicated Logistics, N. Bennet Street School, Mass. Attorney

    General, Weyerhaeuser Corp, CB Richard Ellis, and Legg, Mason.

    Court Experience: Worcester County Superior Court, Suffolk County Superior Court,

    Massachusetts Superior Court and Bristol County Superior Court. Previous

    Employment: Formerly, Mr. Nahigian was Director, Office/Industrial Division of The

    Robbins Group in Cambridge, Massachusetts. Previous he was Vice-

    President of The Norwood Group in Burlington, Massachusetts. He was a

    City Planner in Bowie, Maryland; a planner with Perkins & Will, New

    York City and a junior planner with the Bethlehem (PA) Redevelopment

    Authority.

    page 3

    Professional

    Affiliations: Rob has earned the highest commercial real estate designations, FRICS,

    SIOR and CRE and has been elected to Lambda Alpha International, an

    honorary land economic society. Rob is the 2006 Mass. State Chairman of

    the Commercial-Investment Council and has served as the CRE National

    Chair, Public Relations Committee and on the National Board of Directors.

    He serves (d) on MAR/GBREB Committees; Govt. Affairs; Agency Law;

    Education Curriculum; Worcester Board Ed Task Force; the Board of

    Directors of the New England Chapters of SIOR/LAI/CRE and Boston‟s

    Commercial Broker‟s Association. Rob is a member of the Real Estate

    Education Association.

    With SIOR, Mr. Nahigian serves as National Faculty Chair and was

    National Education Chair, New England Chapter President, National Co-

    Chair, 2001 Boston Convention; National Budget & Finance Committee;

    National Nominating Committee; National Committee VP; NE Regional

    Vice-President; National Executive Committee; National Board of

    Directors; and EdFund (ex officio).

    Industry

    Accomplishments: Rob has been the recipient of several national and regional awards. Rob

    was awarded “2005, 2004 and 2003 Advisory Assignment of the Year,”

    2001 Industrial Deal of The Year”; “Distinguished Achievements in

    Commercial Leasing and Nominated as Boston‟s CBA “2003 Boston‟s

    Commercial Broker of the Year”. He was honored by Banker &

    Tradesman as “Top 125 Business Leaders in Massachusetts”; and featured

    as “Movers and Shakers of Real Estate”; “People to Watch in New

    England Real Estate”; “Who‟s Who in New England Real Estate”;

    “Who‟s Who in the East”; “Who‟s Who in America” and “Who‟s Who in

    Residential and Commercial Real Estate” by various publications. Rob

    was awarded the 2004/2003/2002/1994 SIOR National Instructor of the

    Year and Nominated by WRAR as the “2003 Mass. Educator of the Year”.

    Rob is a NAR Mass. Certified Real Estate Mediator, has served as an

    Arbitrator and is a Certified Real Estate Instructor in Mass. and various

    other states.

    Professional

    Lectures: Mr. Nahigian is a one of the industry‟s sought after national speakers. He

    is a Senior Lecturer at Boston University, SIOR and MAR and has

    lectured at Harvard, MIT, Northeastern, Rutgers, Lehigh and DePaul

    Universities. Mr. Nahigian is an invited speaker in the United States,

    Canada, Mexico, South America and Europe by SIOR, Colliers, CB

    Richard Ellis, NAI, FIABCI, ONCOR, CoreNet, CCIM, NAIOP, CRE,

    Mexico AMPI, Latin American Real Estate Conference and other realtor

    associations. Mr. Nahigian has co-authored four real estate books and over

    200 professional articles.

    Education: Mr. Nahigian received his BA from Lehigh University and holds a

    Masters in Urban Planning from Columbia University. Rob is a Mass.

    Licensed Trainee Appraiser and Licensed Real Estate Broker in Mass. and

    NH.

page 4

     DISCLAIMER

    Do not rely on the accuracies of any of the information provided. The broker/student should contact professionals, legal counsel or experts on updates, corrections or revisions on any information provided herein and to seek advice.

    As a further disclaimer, the information provided in this course is for educational experiences only. Any names or information are for educational purposes only and should not be relied upon for professional or legal purposes or to aid in a business decision in real estate or any other field.

     INVESTMENT REAL ESTATE OUTLINE

01. Definition of Investment Choices

02. Real Estate Cycles

03. Measuring Investment Performance

04. Creating Investment “Seed” Money

    ; How is it Created?

05. Entrance/Exit Strategies

06. Benchmarks for Returns and Valuation

07. Investor Behavorial Research

08. The 3 Key Variables to Accumulate Wealth

09. Real Estate Advantages/Disadvantages

10. The Composition of Overall Yield in Real Estate

Course Objective

    As a result of this investment module, the investment real estate broker will be exposed to the history of risk, yield and valuation that will assist an entrepreneur client in developing valuation, entrance and exit strategies for possible acquisition or disposition of income-producing properties.

page 5

INVESTMENT REAL ESTATE ORGANIZATIONS AND SUGGESTED BOOKS

1. Society of Industrial and Office Realtors (SIOR)

    1201 New York Ave, NW

    Suite 350

    Washington, DC 20005

    (202) 449-8200

    www.sior.com

    2. The Counselors of Real Estate (CRE)

    430 North Michigan Avenue

    Chicago, Illinois 60611-4089

    (312) 329-8428

    www.cre.org

3. Certified Commercial Investment Member (CCIM)

    430 North Michigan Avenue

    Suite 600

    Chicago, Illinois 60611-4092

    (312) 321-4460

    www.ccim.com

4. “Crittenden Directory of Investors”

    Crittenden Publishing, Inc.

    P.O. Box 1150

    Novato, CA 94948

     (800) 421-3483

     www.crittendenonline.com

5. National Council of Real Estate Investment Fiduciaries (NCREIF)

    (Statistics on commercial properties in U.S.)

    Two Prudential Plaza

    180 North Stetson Ave, Ste 2515

    Chicago, IL 60601

    (312) 819-5890

    http://www.ncreif.com/indices

6. “Deflation”

     by Dr. Gary Shilling

7. “Roaring 2000s”

     Roaring 2000s Investor”

     by Harry Dent, Jr.

8. Millionaire Next Door”

     by Dr. Tom Stanley and Dr. Bill Danko

page 6

9. Richest Man in Babylon”

     by George S. Clason

10. The Wealthy Barber”

     by David Chilton

11. Millionaire’s Mind”

     by Dr. Tom Stanley

12. Total Wealth”

     by Mac Barnes

13. Mystery of Capital”

     by Prof. Hernando De Soto

14. “The Intelligent Investor”

     by Benjamin Graham

15. “Against The Gods”

     by Dr. Peter Bernstein

16. “Pig in the Python”

     by David Cork

17. “Bobos in Paradise”

     by David Brooks

18. “The Warren Buffet Portfolio”

    “Latticework”

     by Robert Hagstrom

19. “Learn to Earn”

     by Peter Lynch

20. “The Street Addict”

     by Jim Cramer

21. “Getting Loaded”

     by Peter Bielagus

    page 7

     INVESTMENT CHOICES

    I. DEFINITION OF INVESTMENTS

    ; How are investment choices defined?

    INVESTMENT CHOICES

    STOCKS REAL ESTATE

     OFFICE SFDU

    BONDS INDUSTRIAL

     APTS

     RETAIL

MUTUAL EXISTING

     FUNDS BTS

     SPEC

COMPANY

    ACQUISITIONS

    COMPANY

    START UP

    BUY A VENTURE COMMODITIES

page 8

    REAL ESTATE CYCLES

    7-10 YEARS

    SECTORAL COMMODITY

     Hotels ???? PEAK Retail

BID-

    ASK

    SPREADS Residential

    “DENIAL PHASE”

     “YIELD CHASERS”

    THE HERD OR VIC EFFECT

    RECOVERY Office

     Industrial

     BOTTOM

     BUY LOW/SELL HIGH

    page 9

I. MEASURING INVESTMENT PERFORMANCE

    Understanding and Calculating the Concepts of Value

    1. The Big Picture: Why Do People Invest and Why in Real Estate?

2. Wealth-Building

    ; Making An Income

    ; Biggest consumption category: Two Unique Categories that Drive the Need for the

    Investment World

    ; Income vs. Wealth: There is a Difference!

    ; The Profile of Today‟s Millionaire/Investor

    ; Who are the real estate investors?

3. Investment Definition Formula

    ; Discretionary Income Invested in a Commodity to Reach a Future Consumption

    ; Returns Required to Double Your Investment: Why Double?

    ; The Art of Saving: 2/10 Rule

    ; Investor‟s Magic Compounded Rate: 14 7/8% Why?

    ; Can you compound with real estate assets?

    ; Global Savings Rate: US vs. Other Countries

    ; The most likely real estate investors

    page 10

4. “Entrance” Strategies

    ; Examples of “Entrance” and “Exit” Strategies

    ; Why both are important to formulate “yield returns”?

    ; Taurus News (Oct-Dec.2004) of Newton, Mass. “We are not in the real estate business,

    rather we are active in real estate so that by careful management we achieve yield for our

    investors and a profit for Taurus. So it will be in 2005.”

5. Today‟s Benchmark for Determining Real Estate Investment Returns:

    ; It‟s constantly changing

    ; Critical Variable in establishing yields

6. Risk vs. Reward; It‟s Evolution to Real Estate

    ; Who Defined Risk? Year 1654

    ; Required “Yield” spreads with investments

    ; Risk Definition

7. Investor Behavioral Research

    ; How behavioral science effects value

    ; Group behavior is important. People react fast to bad news and too slow to good news.

    ; Risk Adverse v. Loss Adverse

8. Real Estate Investment Rules:

    ; An investor expecting above-average risks should demand above-average gains

    ; An inefficient real estate portfolio is one that exposes the investor to a level of risk

    without equal return

    ; To achieve a greater return is to incur additional risk or be forces to go out further on the

    capital market line.

    ; If you want less risk, then step down the capital line and receive less return.

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