Introduction to Real Estate Development Analysis

An excerpt from, "Mastering Real Estate Investing" -- Learn how real estate developers and rehabbers evaluate potential projects

Just as with income-property investing, real estate development is a numbers game — and the only way to win is by understanding how the numbers work.

What is a project cost analysis? What kind of due diligence do I need to perform? How can I estimate the ultimate value of project? What kind of return on investment can I expect? Real estate expert Frank Gallinelli, Ivy-League professor, best-selling author, and founder of RealData Software, teaches this master class. You will learn how to approach development projects intelligently, and how to separate the winners from the losers.

In this excerpt from his complete course, Frank covers the basics:

  • The back-door approach — a use looking for a site
  • The front-door approach — a site looking for a use
  • Due diligence
  • Project cost analysis, including an understanding of hard costs, soft costs, and imputed interest
  • Development financing, including loan utilization factor

...then takes you through a series of virtual case studies that deal with three different development scenarios:

  • Small office building development, where you demolish and rebuild
  • Apartment building development, with a more detailed project cost analysis
  • Phased commercial development, where you may be leasing some units while still developing others; with month-by-month planning for costs and loan draws

This development course is a subset of Frank's larger and more comprehensive course, Mastering Real Estate Investing.

If you choose later to enroll in the complete course, you'll discover more than 60 videos covering a wealth of important topics:

  • The Four Basic Returns
  • The Vocabulary of Real Estate Investing
  • The APOD and Income Capitalization
  • Time Value of Money
  • Real Estate Pro Formas
  • Discounted Cash Flow Analysis
  • Real Estate Investment Metrics
  • Mortgage Financing and Underwriting
  • Case Studies: Apartment, Mixed-Use, Triple-Net
  • Real Estate Partnerships
  • plus all of the content in this mini-course, Introduction to Real Estate Development Analysis

Your Instructor

Frank Gallinelli
Frank Gallinelli

Frank Gallinelli is the author of the best-selling book, What Every Real Estate Investor Needs to Know About Cash Flow... now in its third edition, as well as other books and numerous articles on real estate investing and finance. He is a graduate of Yale University with a degree in psychology, holds a Master's degree in education from Southern Connecticut State University, and served as Adjunct Assistant Professor in Columbia's Master of Science in Real Estate Development program for over a decade. Gallinelli has been involved in real estate for more than 40 years and is the founder and president of RealData, providing real estate software to equip and educate investors and developers for success. RealData's flagship product, Real Estate Investment Analysis (REIA), uncovers the value and potential returns of any income property, and the company's development applications guide you through multifamily, commercial, subdivision, and condo projects. With Gallinelli's video courses, you'll develop the confidence and skills to evaluate investment opportunities for maximum profit.

What are students saying about Frank's courses?

"The Real Data Intro to Real Estate Investment Analysis is an outstanding course for all real estate professionals! The course is thorough, clear, concise, and professionally delivered. The content is very relevant to actual real life real estate investing. The case studies are particularly valuable as Frank Gallinelli walks you through the thought process of an investor when making high level decisions. I highly recommend this course to anyone working in fields related to real estate and especially for those looking to invest themselves."

Brad Trauth
Trauth Property Group

This is a great video series to learn how to calculate and evaluate income producing properties. The math is the same for all levels of investors. Frank makes sure that you don't just accept what is given to you but explains how to look beyond and see the big picture of the potential investment.

A helpful, insightful, and well-structured course that can take you from newbie to capable investor in relatively short order. Complex concepts are well explained and well illustrated with examples.

I felt this course was extremely useful for my start of multi-family apt investment. I had Frank's book, but this course was perfect for me. I have full confidence my ability to analyze different properties.

This is an AWESOME course. I only passed through once however, I will go through it again. I believe if I can master the thought process as well as the the tools and techniques. I will have a competitive edge in making, presenting and operating all property classes. Thank you for your time hard work and due diligence putting this course together. It is everything you're not told at the seminars.

I felt that this course has properly formed me to make informed, calculated and intelligent decisions in regards to my future real estate investment portfolio. You're the man Frank! I will highly recommend this course to anyone interested in the real estate investment world.

“Dear Mr. Gallinelli, thanks so much for explaining the hierarchy of a pro forma for an income producing property in a very simple way. Your skill to translate investment concepts in a clear fashion to real estate investors is outstanding” --Maibi Rojas

Great course - especially for a beginner commercial investor like me.

The case studies were very very helpful to better understand the lesson in not only mathematically/numbers, but also conceptually and how a certain situation goes by in real life.

Your skill to translate investment concepts in a clear fashion to real estate investors is outstanding.

Frequently Asked Questions

When does the course start and finish?
The course starts now and never ends! It is a completely self-paced online course - you decide when you start and when you finish.
How long do I have access to the course?
After enrolling, you have unlimited access to this course for as long as you like - across any and all devices you own.
What if I am unhappy with the course?
We would never want you to be unhappy! If you are unsatisfied with this course, contact us in the first 10 days and we will refund the purchase price of the course.
Do I need to have a knowledge of finance in order to benefit from this course?

We make no assumptions about your prior background or experience. The course will start with the basics, and from there it will move gradually into topics of greater depth.

Your syllabus shows a lot of metrics and calculations. Do I need to be a math whiz?

Not at all. You'll find the math to be surprisingly simple, and I take special care to explain it clearly, with plenty of examples. Real estate investing is all about the numbers, and success comes to those who understand how the numbers work and what they mean.

How long is the course?

Development course — a subset of the main course — includes eight video lessons. The complete course includes 54 videos totaling more than nine hours -- and growing. Each video is about 7 to 18 minutes long. You can watch each lesson as many times as you like to master its content. You will be able to access additional video lessons as they are added.

Is the course just the videos?

No. For lessons that focus on metrics or calculations, we provide a good number of practice problems and answers. We also include several spreadsheet templates that you can use to make many of the calculations and perform some of the analyses discussed in the course. We also provide quizzes so you can test your understanding of the material you've studied.

Do I need to have the RealData software in order to take the course?

You don't need any outside software to take the course, although we do recommend you have Excel or a similar spreadsheet so that you can take advantage of the templates we provide. When you begin working on real deals of your own, we hope you'll take advantage of the powerful and sophisticated tools offered at

Do you have a course that will teach me more about the RealData investment analysis software?
Yes, we do. You can find it at... How to Evaluate an Income-Property Investment That course will take you through the analysis of a mixed-use property using the REIA Pro software.
Can I watch the course videos on my mobile device?
Yes! You can watch the course videos on your smartphone or tablet.

"The course taught the most important concepts that I need to know in my early stage of learning real estate finance. The instructor has a keen talent for explaining the initially mind-boggling concepts in a painless way through easy-to-understand language and examples. I recommend this course to anyone who has any interest in the real estate field."

Erica Lee

Professor Gallinelli has the magic to make complicated concepts easy to understand. ... I feel much more confident to analyze a property based on all the available information and to make informed decisions with limited information.

Christina Chao

I found the course to be the perfect complement to your book. I appreciated the fact that each video is short which allows the user to digest the material in a simple fashion. I also like the fact that you incorporated a quiz to test my knowledge of each concept. All in all it was really what I was hoping for and I have way more confidence today when analyzing income properties than I did before the course.

—John Cameli

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