I'm going to have to complete a case study/modeling exam for a small repe firm. The firm invests in hospitality, office, condos, and mixed-use assets. I was told the exam isn't very complicated, that i should build a cash flow and be familiar with return multiples, and i don't need to do a waterfall. Any idea what to expect?
For something like this -- is it expected that you do a monthly cash flow or is yearly acceptable? I ask this because in my current role, I am not underwriting anything as most of the work I do is post-transaction/advisory/financial reporting work and all of our cash flows are yearly..
ANY guidance would be appreciated. I've never had to do a modeling exam for a job before so I don't really know what to expect at all.
I did one for an internship at a REPE (didn't get the internship, but there were lots of applicants for one summer opening, take that as you may). It was a pretty simply setup, purchase a building all cash with a GP/LP structure, after 2 years refi and distribute the cash. Simple waterfall structure and the debt was limited by either leverage or DSCR (you had to determine which one was the limiting factor). The answer they were looking for was the IRR and equity multiple afer a hold of 5 years.
I did it with a monthly setup since you want to make sure the refi and cash flows happen at the right time in the year for discounting. It's also not that tough to go between monthly and annual, Monthly gives you better control of timing (say you're doing an 18-month construction development) and if you really need to roll it up into an annual cash flow just get good at sumifs and index-match.
Have you done any financial modeling for real estate assets before?
Waterfall modelling for an internship? Either one of the best shops on the street or the administrator is a clown.
MBA internship at a top firm on East Coast, doesn't seem that outrageous.
Didn't know internships after MBA were a thing...probably my own ignorance from being the other side of the world!
Internship during* my MBA, in America they're two year programs and for the summer in between you do an internship. I better land a full time position after graduating haha, I'm not paying all this money for just an internship afterward!
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