Looking for REIB interview case studies.

For your upcoming interview with a real estate investment banking group, here are some insights and resources based on the most helpful WSO content:

1. Waterfall Modeling for GP/LP Partnerships:

   • Waterfall structures are a critical component in REIB and REPE interviews. A typical setup involves splitting cash flows based on IRR hurdles. For example:
     • GP contributes 33% of equity, LP contributes 67%.
     • Cash flows are split "pari passu" up to a 12% IRR, after which a 50/50 split is applied.
   • Understanding preferred returns (e.g., 10% pref rate) and how profits are distributed after achieving specific IRR thresholds is essential. For instance:
     • LP might receive 82.5% of profits until a 20% IRR, 75% until a 25% IRR, and 70% thereafter.

2. Case Study Practice:

   • Lookbacks, catchups, and clawbacks are common in advanced waterfall modeling. BIWS and REFM offer templates that can help you practice these scenarios.
   • Familiarize yourself with how equity multiples and time horizons impact waterfall structures. For example, some firms attach equity multiples to prevent time value erosion of IRR hurdles.

3. Recommended Resources:

   • BIWS and REFM Templates: These are highly recommended for learning the technical aspects of waterfall modeling.
   • Articles and Guides:
     • http://www.pircher.com/media/publication/50_SACArticle.pdf</a">Pircher Article on Waterfalls
     • https://www.lw.com/mediaCoverage/real-estate-joint-venture-waterfalls-a</a">Latham & Watkins Guide
     • http://beekmanwealth.com/wp-content/uploads/2013/01/Private-Equity-Inve</a">Beekman Wealth Waterfall Overview
   • These resources provide detailed explanations and examples of real estate waterfalls.

4. Key Interview Tips:

   • Be prepared to discuss how waterfalls are structured based on equity splits, IRR hurdles, and preferred returns.
   • Understand the nuances of GP/LP relationships, such as who holds decision rights, indemnities, and lending relationships.
   • Practice building a simple waterfall model in Excel to demonstrate your technical skills during the interview.

If you’re looking to exchange case studies, consider reaching out to peers on WSO forums or networking with professionals in the industry. Good luck with your interview!

Sources: Trying to understand the concept of IRR, Best way to learn Real Estate Waterfalls?, What waterfalls are you seeing in today's market for developments you're working on?