2 Hour Case Study?
I have a 1 hour interview followed by a 2 hour case study coming up, both of which will be onsite at this firm’s office in a week.
I have already had a 1st round phone interview with an Associate and a VP which went well.
The problem is I have NO on-the-job modeling or modeling test experience. I have about 3 year’s experience in a CRE finance biz dev/sourcing role.
I have fully completed the A.CRE and BIWS courses, and built some simple models on my own time, but I have zero gauge on where my skill stands compared to these cases given. The BIWS courses are labeled as “case studies” but there is no way in hell I would be able to make models that detailed from scratch in just 2 hours.
The firm works on development, value-add, and core deals, all property types. I guess I should expect the case study to be any one of the scenarios and property types?
I wanted to see if everyone could share brief summaries of what their prior 2hr+ case study interviews looked like, how to practice, just to get an idea of what to expect. Of course, tips on how to best prepare myself would be welcome. I mentioned in my initial interview I don’t really have experience with Argus, and my interviewers didn’t seem to mind, so I really hope they don’t ask me to use it or I’m screwed lol. Would asking the HR rep about case study details cause a red flag?
I really want to knock this out of the park, I liked the guys I spoke with and the firm seems like a great spot to start.
I appreciate any feedback/advice, thank you.
What level are you applying for? I think modeling tests should matter less and less the higher up the chain you are.
Honestly having only 2 hours I would really nail down your excel shortcuts if you haven't already. Exponentially speeds things up.
I think asking generally about the parameters of the test would be acceptable but they likely wont give you exactly what they are going to ask.
Hi, would you please share the case studies with me as well?
Hey man, could you please share your case studies with me too? I have a Debt Advisory case study coming up. Thanks
Hey Vlad - check my post history. I made a thread with some. Please add yours after your test
I also have a 2-hour case study for a smaller firm that specializes in sell-side advisory. I am not sure what to expect. It is an internship to full time role I am applying for. If you're willing, could you share some advice.
Hi there, could you please share the case studies with me as well? Have a two hour RE IB analyst case coming up and would appreciate it!
Stop DMing me
May I also have a chance to see your case study?
Would you be willing to send your case study also ?
Would you be willing to share it with me as well?
Hi could you please send them to me as well? Would greatly appreciate that.
2hr case studies are testing basic excel skills and high level real estate financial knowledge. Usually it’s an annual cash flow proforma and looking to see how you set up inputs.
ACRE’s watch me build videos has some basic examples of this.
I would say 2 hour cases usually incorporate a simple waterfall as well, but depends on the position you're interviewing for (at analyst they might just be giving you extra time for property-level).
In any test we administer to potential analysts, we are not giving any scenario that would be overly complex or time consuming. We might give a prompt like "looking to buy an asset at XXX purchase price that generates X revenue with Y expenses and grows at 3% and 2% annually respectively (in this instance it would be a multifamily asset and not something with built in step rents like office or retail). Assuming the loan on the acquisition is sized on 1.2x DSCR, 6% Debt Yield, or 70% LTV with a 5% interest rate amortized over 30 years. Create a model that shows the levered and unlevered returns of the deal on a property level assuming 10 year hold period. Assuming 10% GP contributed capital with a 20% / 80% split over 12% IRR, also show the investor level returns."
There's usually a bit more fluff involved and some actual numbers to work with, but as you can see, we aren't asking you to show complex deal mechanics that might take a long time to model from scratch. Realistically, it should take 5-10 minutes to model the cash flows to NOI, 20-25 minutes to size out the loan/ show debt service/ calculate loan amount at dispo/ create a S&U table to find equity requirement, and then from there a couple minutes to create the return metrics at the property level. The remaining 1.25 hours should be creating the waterfall (arguably the longest part of the test) and double checking your work and making the formatting look nice.
Like others have said, we aren't looking for a perfect model, just to show that you understand the basics and you only need to be fine-tuned rather than completely teach you everything from scratch. Obviously, the more adept you are at modeling, the more it helps. But, it is not a complete deal breaker if you make a couple errors.
I would agree this would be a modeling test, but if OP said Case Study specifically then I assume more Entity level NOI and returns, and then more qualitative.
Very true. I assumed just a modeling test on an individual asset level when giving my feedback. But if they are looking for entity level investments such as a Pension Fund or institutional LP, then this is looking more at historical returns and qualitative data such as investment thesis viability in their target markets, corporate infrastructure to scale and execute on a consistent basis, and other factors such as that.
When you say "Assuming the loan on the acquisition is sized on 1.2x DSCR, 6% Debt Yield, or 70% LTV" does this mean the loan amount is whichever of those 3 requires the least funding?
Yes. Basically size the loan off of each covenant and whatever the lowest amount is, that's your loan. That's why you might hear someone say "we are coverage constrained" is because the DSCR requirement might have the loan be $20MM but the other covenants might size the loan to $25MM. Whatever the lowest value is, is your loan amount.
Real estate models 101 - if this is an asset level analysis. OP please clarify for everyone if this is for a REIT role, a HF type role investing in REITs, or if this is actually just an asset level modeling test. Those will help everyone better help you. The fact that you said case study specifically is throwing some people off.
Income
Rent
Parking
Rev share
Other
CAM
Expenses
Taxes
Insurance
Maintenance
Management
Other
Debt service setup
Income - Expenses = NOI
NOI/Purchase price = Cap Rate
That will litterally cover 90% of it. The only other thing to drill down on is the waterfalls and levered/unlevered IRR tables.
In a 2 hour test they care more aobut how you structure your model, how you lay it out, is it clear what is going on and can you get the above referenced information in and run out for 5 to 10 years with the growth paramaters given
What about a 4 hour case study? How do you prepare for that? What should I expect?
Go through Justin Kivels interview guide and beginner excel course with a excel test at the end on Udemny, each should be $20 or so. The interview guide has like 5-6 scenarios but I've generally seen it as the second one (beginner excel course) either build down from NOI or a whole monthly proforma.
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