Real Estate PE LBO - Exercises

Dear all,

I made it to final rounds at a large Real Estate PE Firm. I am a second year undergraduate student and therefore have not to much PE interview experience. I would be super happy to find any helpful material to train for Paper LBOs, as I will be given short 20-30min cases during the interview and would like to familiarise with potential questions.

Does anybody know where to find useful resources that take me through the process?

Many thanks!

5 Comments
 
Best Response

Odds that you'll have to do a lbo model for a large REPE firm are slim to none, unless they have a traditional PE arm and that's what your interviewing for. lbo models are more so used in traditional PE firms that buy/sell companies not RE. Would more so need to be able to run a DCF model for a perspective property. Bunch of similarities between the two, but RE models are less granular than a full blown LBO model (i.e. no Sources & Uses tab).

Basically, based on the past year of financials and a rent roll forecast out CFs for predetermined hold period (3-7yrs), sale of property at the end of hold (NOI/Cap Rate), factor in any debt and calculate unlevered and levered IRR.

 

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