How / why it’s a great lead in to RE.
Project assessment; does the prospective project make sense? Does it give back a valued return? The question leads to an assessment of the cost of the project vs the benefit. Look at a property deal as a project and apply cost / benefit analysis.
Which leads to Project ROI, Return on Investment. There is more than one way to compute ROI. For projects, Real Estate or otherwise, my choice tool is IRR, Internal Rate of Return. No matter what you decide to use, ROI will provide at least a minimal basis for comparing projects.
That reminds me, what is IRR? The easy way to look at; it’s the interest rate earned in the final analysis. Look at a project, an account or an enterprise from the end (or any interim time you like) back. How much went in. How much came out. Get the rate of return from these simple numbers. It only gets a little complicated if there were withdrawals or cash injections. Those changes affect the time that the interest was being earned.
Project Selection; often an enterprise has a choice of projects it would like to execute but cannot risk doing all of them. The question becomes, which project produces the greatest benefit. Same thing holds with property deals. Once the cost benefit analysis is done for each deal (Real Estate Project) we will incorporate that information into the selection process. Often the best project choice is more complicated than simple ROI. That covers too much ground for this purpose and could be a future topic.
These Project management capabilities cross over nicely to Real Estate deals.
So far the discussion is about Financial tools. What about other project management capabilities?
What about the Triple Constraint? Some say: Cost, Quality, Time; pick any two.
Planning: Scope, Objectives, Work Task List, Budget, and schedule for basics.