The Fundamentals of Real Estate Development

Question 1

Explain the “space time” characteristic:

Answer 1

Time on real estate has a particular monetary value. In a money economy the ultimate criterion is MONEY.

Question 2

Real estate development is important because:

Answer 2

Real estate development is not only accommodating an activity within a parcel of land, but also adapts to the context of a specific surrounding environment, involving different personalities and interest groups, as well as limited resources.

Question 3

Basic Real Estate Relationships consists of three following groups:

Answer 3

1. Space Users: consumers attempting to rent or buy real estate to cater to their specific needs. To achieve their desires a property must have the following: location, space and operating cost.
2. Space Producers: all forms of expertise necessary to convert from space-time to money-time. Persons with expertise in creating and maintaining spaces of Space Users

• who assemble the capital
• who prepare the materials
• who contribute to the assembly of the site

I.E. Architects, mortgage banker, lumberman, lawyer, city planner etc.

3. Public Infrastructures: provide a network of tangible and intangible off-site systems for the individual Space Users.

I.E. Streets and sewers, other utilities such as: education, police, deed or registration, government regulations – all becomes elements of infrastructure when there are economies of scale to be enjoyed through collective action of many parcels, leading to off-site centralization

Question 4

The Critical Common Concern in Cash Solvency is:

Answer 4

Each enterprise (aka groups/sub groups) is a cash cycle operation. Cash solvency of each enterprise in the total process is the pivotal issue of survival and the one measure of self-interest. Cash solvency is a continuing test of management, and cash surplus the measure of survival risk.

• Desirable real estate program permits maximum satisfaction of the consumer within an affordable structure, while respecting environmental limits of the natural resources and permitting the public infrastructure and space production groups to achieve cash solvency.

Question 5

Real estate has FOUR dimensions, name all:

Answer 5

Length, width, height and TIME