Hi Guys,
I put this together the other day, first time I've made a model from scratch so would really appreciate your feedback!
Ignore ‘weighting to new development’ and ‘weighting to amenities’ in revenue weight. It was something I originally had but decided to remove.
| Attachment | Size |
|---|---|
| BM Custom Model.xlsx 164.48 KB | 164.48 KB |
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Looks good from a formatting perspective. Don't have time to play with it yet but the one thing I would suggest is on the unit list tab to simplify things a bit is create one entry per unit type not for each unit. You can update the rent per unit by averaging per unit type.
Noted, thanks dude!
Given that the model is assuming 100% vacancy, agreed with this. My caveat would be that this shouldn't be a rule of thumb for any multifamily model.
For development, you should have an input for every different floorplan (not every unit) so you can get granular on pricing. For acquisition of an operational asset, I've never worked with an institutional partner who DOESN'T want a full detailed rent roll in the model.
EDIT: On a separate note, I would not have your rents being driven by comps - they should purely be a point of reference based on which you are pricing your own acquisition so you should have more flexibility to adjust up/down than just a weighting input.
Similar to another posted, I also much prefer to have all inputs and cash flows on 1-2 tabs, with any backup tabs and summary tabs having no inputs on them.
Fairly sharp. Think there's a formula error in the "Unit List & Rent Roll" tab.
I.E.
=$N$3*XLOOKUP(R$1,'Input Assumptions'!$C$34:$L$34,'Input Assumptions'!$C$36:$L$36)
In Columns O to EC, I believe the $N$3 should lock on the column ($N3) and reference vertically and not on that specific cell.
Good work nonetheless.
Thanks for pointing that out, have amended :)
Cheers!!!
Don't know your skill, level. I will assume anywhere from 1-4 years experience. Pretty good.
I'm going to tear this apart.
-Debt is simplistic, doesn't account draws, or actual construction so you don't have a culmulative balance. So essentially works for debt fund funding only, and not a true construction loan. you don't have a consolidated proforma with capex and cash flows(ok i see it now). Needs cash-on cash annual in proforma You don't have a sources and uses tab, so i can't see how you are going to be carrying these costs when you haven't leased up the bulding yet, AND I have no idae what the total project cost is for the development or the yield-on-cost. I am sure there is more, this is what I got for looking for 5-minutes.
IMO- stylistically I prefer the once page view where I see it all consolidated and then high level cash flows. I want to see where my money is going and in what year the project and my invest have return of capital.
Thanks mate - does it make a difference that O made this specifically for a vacant multi family acquisition? I.e, we are simply purchasing after it has been built by another party - not taking on any development risk ourselves
Thanks for the clarification. I assumed it was vacant because it needed work done do it to lease up, otherwise why would anyone sell a vacant building. But get it does happen, just not as often.
Son't need all that dev jumbo, but i would have sources and uses, as you are definitely going to have to carry "some" expenses when it isn't leased up, including the debt service, which the bank may request an interest reserve be funded at closing. You should have a bigger portion of the deb table to find the min and max loan amount from LTV/LTC, DY, DSCR. and have a loan triangulation. In addition there are closing costs that you may need to factor in as well. I would add a sensitivity table in where you compare returns at difference price points too, if you want to get creative.
Again, read it for 5 min, if you have all that stuff in those tabs just ignore.
will you post the updated model after all the changes are incorporated?
I shall do - thought it was best to wait for the comments before doing so!
+1. Final/completed product to post?
Hey guys,
Appreciate all the comments above. What I think I may do is add to this bit by bit and post on this chat. A friend from work mentioned adding a build payment schedule for potential developments etc. Will essentially add what I learn to the model!
Could you provide some clarity?
Your GP & LP contribution is very high for a deal that's utilizing an 80% LTC loan. Or maybe I'm looking at it wrong.
Tbh that's just me being lazy with my assumptions - feel free to change!
How do you see it?
Attachment at botton of post
You should download TTS and auto color the fonts for the whole workbook
on the front tab, you have GP and LP levered IRR both in the 6% range despite property level levered IRR being 11.8%. I'm assuming these are being calculated off the unlevered IRR.
Its decent. As has already been mentioned you are missing a sources and uses tab. I would like to see construction draws as you incur capital expenses to lease up the units. Perhaps a bridge loan, senior on stabilization. Also partnership waterfall is confusing- how does the GP underperform property level when they were promoted?
Why are we "rating" things now? Stints at companies? Excel models?
How long did it take you to do this? Do you think they would have interns do something like this? Some of that shit is intimidating.
It took me around a day. And I think what they would have you do is very dependent from firm to firm. I've seen some pretty easy modelling test from some shops and much harder one than others.
No, they don't have interns do this. I don't expect interns to know how to make a cup of coffee.
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