Evaluation Of Risk In Real Estate Financing And Investment

This paper mainly discusses the issue of evaluation of risk in real estateFinancing and Investment in China.At first, we introduce the main methods of financing and make analysis andforesee of current financing condition of real estate. Then we present the main policyof how to improve the financing system in real estate, and analyses the trend.In the second part we build the risk evaluation model of financing. Firstly, weanalyses the factors of real estate financing project, and then we adopt the AHP andFuzzy method to evaluate the risk of financing. The first step is to set up the projectfinancing risk evaluation index system of real estate; the second step is to use AHP toconfirm the weight relative of every factor, finally it can carry on comprehensiveappraisal to the risk by way of fuzzy comprehensive appraisal.In the third part based on the discussion of venture capital and classification ofinvestment risk, we introduce the DCF (Discounted Cash Flow) model and evaluate apractical investment project which I personally attended via DCF. Meanwhile, wemake sensitivity analysis of discounted rate and commend both the advantage anddisadvantage of DCF model in the investment area when make investment.At last, we make a discussion of the option characteristic of real estateinvestment. The development of real estate owns a typical characteristic ofnon-reverse and can be extended, which makes the investment in real estate optionally.For these real estate projects developed by stages, we adopt both the DCF model andBlack-Scholes model to make practical analysis and point out the problems may bebrought by adopting option method. Finally, we compare the two models.