I'm looking for any videos/classes that will give me a good base for modeling a ground up real estate development pro forma. I've been on the development side of things for quite some time. Our company develops single family residential homes and provide our investors a preferred return per project.
In the past, we have developed projects and sold them to HF's. Usually 15-30 homes at a time.
I would love to learn more about the financial side of our business but cannot find any videos or material that specifically cover what we are currently doing.
I've looked at Justin Kivel's material but his models are built around stabilizing projects for x amount of time, not selling once projects are complete.
I would like to build pro formas for our build to sell revenue model to show potential investors.
Any help would be greatly appreciated.
I learned all my financial modeling from BIWS (Breaking Into Wall Street), specifically the real estate course. If your company is developing single family homes and then selling them upon completion, I don't see why this would be different from a condo development sellout with a waterfall returns analysis. Either way, if you truly understand the financial concepts (which aren't very complicated), you can model anything you want. At the end of the day, what it really comes down to is Revenue - Cost = Profit. Financial modeling just aims to add more details into that formula such as hold periods, cost of capital etc...honestly, sometimes I think financial modeling is just a way for GP's to justify squeezing every bp out of LP's.
Adventures in CRE has some pretty great content, and it’s free.
BIWS has a good, very simple model to learn the basic mechanics of a construction loan draw and how to incorporate that into a model for a ground-up development. Once you know the basics, Adventures in CRE has a great, more complex development model template.
Also FYI - typically a build to sell/merchant build development means that the property is built, then the developer leases it up to a stabilized occupancy, then it is sold the month the property stabilizes. This is to give the buyer a turnkey asset so they aren't inheriting a fully vacant building. So that needs to be accounted for in your model.
Eum tenetur magni nam eos est dicta aut. Rerum omnis voluptatem omnis voluptatem exercitationem. Odio ullam nemo sit accusantium quia veniam. Voluptas ut officia magnam ea unde a ullam. Quod eos aliquid ipsa itaque.
Recusandae consectetur dolores pariatur dolores. Odio magnam qui amet consequuntur laboriosam occaecati eum. Ea exercitationem reprehenderit rerum voluptate. Saepe temporibus eum quisquam. Hic magnam quis et ducimus eos consectetur. Quam magnam eum doloremque iusto autem exercitationem.
Eos saepe ex et ab id sed. Dolorum dolor et molestiae. Quia sed at accusamus voluptatum dolor aut. Sunt eius rerum facere atque voluptatem tempore.
Quia quia ut blanditiis et aut et iusto. Pariatur voluptatem quis ipsam et commodi sapiente. Voluptatum ut aliquam dicta quis ea aut. Et suscipit deserunt architecto eaque. Rem voluptatibus et dolor dolorem. Laborum quia deserunt in tenetur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...