How do I do a watefall model for only the sale proceeds, while the operating cash flows are always pro rata?

Agreed with the above that this should be simple, but I remember when I was just learning waterfalls and could see how you could get confused. This is what I would do:

• Separate out the cash flow and the sales proceeds into two separate lines.
• Split the cash flow into two pro-rata lines (GP and LP). So if the GP is 20% and the cash flow is $100, they get the full $20 allocated to them
• Split the sale proceeds pro-rate as well (if sales proceeds are $1000, then GP gets $200 vs LP $800)
• Apply the entire cash flow allocated to each partner accordingly. This would probably be in the line titled "Preferred return distributed" or "Tier 1 Distributions" where if the cash flow that is split pro-rata ($20 for the GP, $80 for the LP) is less than the required return, the capital account balance will increase and vice versa.
• For the Sales Proceeds - Use a Min function that should be the minimum of the outstanding capital account less cash flow distributions applied to preferred return for the period, or the total sales proceeds allocated to the partner
• Your ending capital balance for the first tier should be 0 (assuming the deal performs better than the required return) as it should read Beginning balance + Preferred return for the period - Preferred return paid - sales proceeds applied to the capital balance
• You should then have excess sales proceeds only to be applied to the next tier. (total cash flow - pref paid - sales proceeds paid = remaining cash to distribute.)

I'm not always the best at explaining, so hopefully that makes sense. I would spend a little more time on understanding waterfalls as this is a pretty simple. The most helpful tip I can give for modeling waterfalls is to break out every calculation (cash flow, refi proceeds, sales proceeds, cash flow applied to preferred return, capital event proceeds applied to preferred return, cash flow used to reduce capital, etc) to make the easier. That way when you have different cash flow events applied differently you can more easily alter the calculations to correspond with the waterfall terms.