6 Comments
 

Not particularly difficult if you can already model the cash flows a few years out along with a sale. Instead of cashing out 100% of the value, cash out however much of a loan you expect to get. Probably between 65% - 75% of the value at that time would be reasonable, depending on property type and location.

Obviously if your model is calculating IRR/NPV jus based on those five years of cash flows, then it won't be accurate considering there will be additional cash flows down the road. What you could do is calculate the NPV of the five years including the partial cash out, and then discount the future property-level cash flows beyond that and just add it on top.

www.assessre.com
 

By that logic - it should be negative with a sale instead of a refinance as well. You shouldn't be leaving that much value (time considered) on the table when you're cashing out ~70% and just discounting the remaining 30%.

This is probably a deal problem, and not a modeling problem. If your investment goal is to maximize IRR - selling earlier is almost always better. That's where the saying "you can't eat IRR" comes from.

www.assessre.com
 

The scenario of refi instead of a sale is generally a mark to market event that can get you cash immediately by obtaining the net proceeds from the new debt after paying off the original loan principal, without paying any capital gain taxes.

At the same time, you boss must have a bull view on the property itself in a longer period holding perspective that you would further gain in property appreciation.

Lastly. the refi scenario will face a new interest rate environment which generally is underwritten higher than the original loan. However, from an interest rate perspective, I would't think the rate five years later will be even lower, since we are already in the lowest level for too long.

 
Best Response

Sed praesentium perferendis incidunt eaque. Velit libero tempora perspiciatis iste dolores voluptatum. Expedita consequatur maxime soluta qui. Qui iusto vel dolorem nobis.

Enim at nulla culpa saepe ut repellat. Esse laboriosam odit laborum fuga id. Corporis modi rerum quasi architecto sunt quia ut. Quasi ut non et ea quo aut sed.

Est voluptatem necessitatibus delectus rem illum quo adipisci. Praesentium delectus at praesentium et rerum qui. Impedit aut libero qui delectus et. Praesentium reprehenderit architecto dolorem repudiandae et eveniet porro.

Career Advancement Opportunities

July 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.9%
  • JPMorgan 01 98.3%
  • Guggenheim Partners 01 97.8%
  • Morgan Stanley 07 97.2%

Overall Employee Satisfaction

July 2026 Investment Banking

  • Moelis & Company No 99.4%
  • Evercore No 98.9%
  • Morgan Stanley 01 98.3%
  • Banco Santander 02 97.7%
  • BMO Capital Markets 12 97.2%

Professional Growth Opportunities

July 2026 Investment Banking

  • Evercore 01 99.4%
  • Moelis & Company 01 98.9%
  • Morgan Stanley 06 98.3%
  • Goldman Sachs 01 97.8%
  • JPMorgan 01 97.2%

Total Avg Compensation

July 2026 Investment Banking

  • Vice President (16) $429
  • Associates (46) $258
  • 3rd+ Year Analyst (8) $210
  • 2nd Year Analyst (22) $179
  • Intern/Summer Associate (14) $159
  • 1st Year Analyst (80) $150
  • Intern/Summer Analyst (73) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

1
redever's picture
redever
99.2
2
kanon's picture
kanon
99.0
3
Secyh62's picture
Secyh62
99.0
4
BankonBanking's picture
BankonBanking
99.0
5
DrApeman's picture
DrApeman
98.9
6
dosk17's picture
dosk17
98.9
7
Betsy Massar's picture
Betsy Massar
98.9
8
CompBanker's picture
CompBanker
98.9
9
GameTheory's picture
GameTheory
98.9
10
Jamoldo's picture
Jamoldo
98.8
success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”