propco llc model
Having come from corp fin sector (restructuring IB) for several years, i'm used to LBOs/3 statement models as I personally find them cleaner than project finance models wihch are very messy. So I built a propco LLC model that mirrors a standard property lbo + turnaround project. Does anyone else build these at their firm? It took me about 1 hr to build one as the property assumptions are fairly straightforward (this is for a hotel)..just curious if others do this too since I know repe modelling is mostly project finance cash flow models. Having a BS is so much better just to see total capitalization and how much cash you actually have..I know project finance models assume no cash is held at the LLC level but in reality that's simply not true since you need a min cash balance to fund opex and you do have WK issues at the end of the day especially for operationally intensive RE. Willing to share the model if anyone's curious.
I would venture to guess that almost nobody here does 3-Statement LBO Models for value-add real estate deals. But, perhaps there is some merit in doing it how you have described.
Please share if you don't mind.
Would be interested to see it. Curious as to how you incorporated it.
I'd be interested as well. Can you PM? Thanks!
Would also be interested to see. Assuming it's not proprietary, could you post some screen caps?
I basically incorporate working capital and sources and uses into my property models to help with cash management projections by starting with the balance sheet as representing everything historical. If the balance sheet is 9/30, then I'm projecting cash flows starting 10/1 in Argus to get NOI and CapEx for speculative leases only. I track CapEx for executed leases and projected building capital on another worksheet that I can update with property managers and accounting each month for what was actually booked on the balance sheet, so I just have the remaining expenses.
The cash flow page I work with would just grab 1-2 lines from the Argus cash flow export, then I link in working capital into the model by grabbing items from balance sheet like, Cash, A/P, A/R, security deposits, prepaid asset accounts like tax escrows held by lender. For sources of cash for TI/LCs/building capital, I try to model in pre-funded escrow accounts held by lender that I could draw on, or reserve accounts the lender would let me draw on up to a max and increase loan balance.
I have a cumulative operating cash account that accumulates until disposition, or I could say make a distribution to increase IRR, or if below 2-3 months of operating expense reserve, project a capital contribution.
Would love to see if you don't mind sharing! Thanks.
Interested as well. Would appreciate if you can share it.
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