Modeling at work vs modeling tests
Hey all, I work at a large multinational real estate investment firm and we have very well built out templates for the investments we focus on. The template model is fairly large and complex but I've come to understand it quite well over the past few months that I've been in the role. When modeling, I am usually not modeling from scratch. Rather, we are using the template and making adjustments / adding in functionality where needed. However, for modeling tests, I've noticed your expected to be able to complete a model from a blank excel file with no guidance or resources to glance at. For those who are analysts and have 1-2 YOE and are looking to make the transition, how did you prep for the tests? I don't feel as if my day job has prepared me well to absolutely murder these tests. Instead, I've come to understand our model very well, can work it in very easily, and have learned a lot about other key areas (JV's, loan docs, mitigating risk, etc). Modeling on the job is fairly different than opening up a blank excel sheet and putting something together in a few hours. If I had a modeling test that I was to complete over 2-3 days, I would easily pass. If I had to complete something in 2-4 hours, I am not as confident in my ability to knock it all out without any references, etc. I’m very familiar with excel and all of the main functions needed to complete a model.
You just need to practice actually building models from scratch for interviews. There is no silver bullet. Just put in the work. And then you’ll be ready. I’ve always found interview modeling to be BS. You never (rarely) model from scratch at a job. Firms have templates for efficiency’s and accuracy.
The above is the only real answer. When I used to model or when it was a larger component of my job, I would always work off a template that I refined over the years, and would change depending on if it was development or acquisition.
This - you're also modeling a one-off deal in interviews so your model will be WAY less complex/dynamic than any professional template.
Alternate take - with how weak zoomer talent is, I’d want them to prove they are competent enough in excel to do it from scratch
Look for Justin Kivel's Break into CRE courses on Udemy. He has a dedicated one for interview modeling tests. The tests are not rocket science so it's just a matter of knowing what to expect and practicing it.
Love Justin Kivel.. get his Break Into CRE course though not the udemy one.
Check out some of the case studies on the ACRE site. They have a bunch of cases that are pretty good representations of what you'd be asked to do for an interview case study, so you can try to bang out some of those on your own,and then check yourself with the solution files they provide. The "Watch Me Build" videos they have are also awesome for getting an actual visual walkthrough of how to approach putting together a model from scratch.
Hi,
Could you send pls ACRE website?
Thanks
https://www.adventuresincre.com/academy/
Practice practice practice
If you only have 2-4 hours, the model test scenario should be pretty simple, though.
IRL nobody models from scratch. Case in point, I had to model construction loan funding and levered cash flow recently. Haven’t done it in years. Took me so long and found basic mistakes. Pretty embarrassing, tbh.
I prefer modeling tests to be a blank excel sheet. I once had a timed one where I had to use their model and it took me too much time to figure out how different tabs are connected, etc.
I
I have never had to build a model from scratch at any of my institutional shops. There is always typically a template that is just reconfigured for certain types of deals. Even if you HAD TO build from scratch for whatever reason, you can piece together parts from other models to create one which I have done.
Find 10-20 IMs on your drive and model each deal from scratch, blank excel each time. It's rare that you'll be given just an IM, you'll typically be given assumptions instead so review it, write down what you believe the key assumptions should be and model it out. Aim for less than 2 hours. There are a couple of ways to expedite this, learn how to layout a well-formatted pro-forma in <10 minutes. Then model out the deal, include debt and a simple promote waterfall as these will typically come up. If you can get really comfortable with it, include a mezz piece in the structure and 2-3 tiers in the promote waterfall.
The most important thing on modelling tests is to do the bare minimum to answer the question asked in the timeframe provided. Add in bells and whistles once that's done. All we're testing is your familiarity with excel / deal concepts. There's a surprising amount of junior staff who can't articulate key concepts because they've always worked from firm templates and never understood the underlying concept of what's being modelled. They just flex inputs and get the outputs they want without understanding how it flows through the model.
Voluptas quaerat dolor tempora quia adipisci ea expedita sunt. Necessitatibus qui consequatur officia nemo consequatur accusamus. Ut ut nihil aliquam.
Non libero quam culpa quod et facere. Voluptate et beatae praesentium sed tempora. Reprehenderit facilis magni amet dolorum eligendi ex aut repellendus. Doloremque id et suscipit totam molestias cumque impedit facere.
Asperiores eum omnis consequatur expedita quis quidem. Soluta ut quas vel praesentium id asperiores et. Magnam ipsam perferendis tempore natus illo autem aut ratione. Voluptate beatae error ex et repudiandae velit. Autem laborum consequatur et fuga et est. Omnis rerum quos harum molestiae veritatis quia qui. Aut rerum fugiat est repellat magnam ad et.
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...