Investment Analysis & Risk
Quantify risk, stress-test deals, and forecast performance
Every deal looks great in the base case — what separates pros from amateurs is how they handle downside scenarios. This course teaches sensitivity analysis, Monte Carlo basics, debt yield, break-even analysis, and the risk-adjusted return metrics institutional buyers use.
What you'll learn
- Run sensitivity and stress tests on cap rate, rent, and expenses
- Calculate debt yield and break-even occupancy
- Understand risk-adjusted returns and how to think about probability of loss
- Build a three-scenario pro forma: base, upside, downside
- Know when to walk from a deal that 'pencils' but is actually fragile
Lessons
- 01
The Six Types of CRE Risk
Every commercial real estate deal is exposed to a defined set of risks. This lesson catalogs them, ranks them by importance, and shows how to think about each one before committing capital.
12 min - 02
Sensitivity and Scenario Analysis
How to formally test the robustness of a CRE pro forma — single-variable sensitivity, multi-variable matrices, and the discipline of treating the base case as one of many possible outcomes.
11 min - 03
Debt Yield, Break-Even Occupancy, and Lender Risk Metrics
The metrics commercial lenders actually use to size loans and assess deal risk — debt yield, break-even occupancy, DSCR — and how to underwrite a deal to lender standards before they ever see it.
12 min - 04
Building the Three-Scenario Pro Forma
How to structure a downside / base / upside pro forma in Excel — input toggles, scenario tables, and the discipline of presenting all three to investors so the conversation is about probabilities, not predictions.
12 min - 05
Stress Testing and Downside Protection
How to model the catastrophe scenario — recessions, tenant bankruptcies, refinance shocks — and use the results to size leverage, build reserves, and price risk into your deal structure.
12 min - 06
Risk-Adjusted Returns and Probability of Loss
How to compare CRE deals on a risk-adjusted basis using probability of loss, return distributions, and the institutional concept of risk premium — moving beyond raw IRR to make smarter investment decisions.
11 min - 07
Knowing When to Walk — Red Flags and Deal Killers
The most valuable skill in CRE investing isn't picking winners — it's avoiding losers. A practical catalog of red flags, deal killers, and the discipline of walking away from deals that don't pencil.
11 min
Up next
Finding Commercial Deals
Where deals actually come from — hint: it's not LoopNet