Business Finance and Real Estate investing

Document Type:Research Paper

Subject Area:Finance

Document 1

Notably, business finance encompasses the understanding and implementation of dynamics that revolve around assets and liabilities; with a desire to exercise prudent money management patterns within a given business cycle. In a broader perspective, business finance assumes a scientific approach of tracking the wellbeing of a business venture from various points of reference, guided by overall business objectives within a given time frame. In the same fashion, understanding the dynamics of assets and liabilities calls for effective monitoring or tracking of business expenses right from budgeting, investing, banking, and evaluation of taxes, to strategic evaluation of the competitive advantage the business ranks within its industry. Additionally, business finance gives an investor a holistic look of, or an inception of business ideas that strategically aid in yielding highest interest-output for given amount of money and within a given business cycle (Stowell 2-14).

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Interest Investing in real estate constitutes a narrower scope of business finance that currently dictates the overall global market indices. Devising sound business ideas comes as a product of identifying and conceptualizing factors that influence the success of the venture at hand. Sound business decisions emanate from the desire to achieve optimal resource allocation for profit maximization while impacting on the business and society at large. Decisions range from what kind of real estate to venture into, source of finance or capital, rate of return for the business venture, impacts of the business to the society, the location, when to start, and where, to evaluation of managerial expertise required to run the venture. Intelligent and insightful evaluation of these factors and in collaboration with astute analysis of risks at all stages of establishment will yield positive results in the whole business of investing in real estate.

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Literature review Prior to the global recession of 2008, investing in real estate has had tremendous growth due to the global surge in demand for housing. Personal financing entails pooling of capital resources from individual sources in a bid to kick start the business. The sources may include savings, personal loans, retirement benefits, property insurance and income from other investments. Corporate financing, on the other hand, entails strategic and long-term sourcing of capital from huge financial institutions and development partners to aid in kickstarting the venture. Finally, depending with the entity in question, a company may opt for public financing through an Initial Price Offer, or generally floating its shares to the public for joint ownership of the whole venture (Glickman 12-23).

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Risk management plays a paramount role in the establishment and smooth running of real investments in that, it helps in cushioning the investors on the volatility of their business on a myriad of factors. Notably, the book emphasizes on the needs for capital and highlights the process of securing funding for business entities that need it. In addition, the book accompanies case studies with spreadsheets designed to help learners create personal analytical frameworks into understanding choices of funding strategies. From a holistic approach, the book integrates cases into chapters, reflecting recent transactions from a global perspective, accompanied by reflective questions and answers. Glickman, Edward.  An introduction to real estate finance. The book highlights on the importance of considering various factors before settling on the kind of venture to establish in real estate investments.

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The book features excellent mixture of theory and applications, while providing various sets of data and data analysis techniques to aid in conceptualization of the whole investment. A renowned scholar, Roger J. Brown serves as the director of research at the Real Estate and Land Use Institute of San Diego State University, and as the President of IMOJIM real estate Investments. Notably, he brings to life a simplified application tool for intensive data analysis and techniques for commercial and residential projects. Kumar, Rajesh.  Valuation: Theories and concepts. Academic Press, 2015. The book comparatively provides concepts and theories of valuing a company by providing prospects to look out for. The book employs myriad accounting procedures backed with economic concepts that highlight the functioning of business from time to time.

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