Acquisitions Analyst Test

hfa333's picture
Rank: Monkey | banana points 54

I was given this test for an acquisitions analyst role. My main concern is the assumptions for the real estate deal, particularly how to invest continuously in the same transaction. It seems too complex to do a debt/equity waterfall model when just comparing investment value after a certain amount of time. The IRA was a simple NPV cashflow model. Can anyone give me some input here?

1) Prepare a basic financial model comparing a standard 401k investment with a typical real estate transaction. You can make any assumptions you would like regarding the real estate transaction, but please be prepared to explain your logic. Use the following assumptions for the 401k:
100% match of up to 4% of a 60k per year salary
Retire and withdraw 401k at age 65
You are able to invest in the same real estate transaction continuously over the allotted time

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Comments (8)

May 18, 2018

Don't overthink it, I think the people testing you are overthinking it.

Just use a standard pv,i,n,pmt, = fv for both.

IF you don't include debt for RE they may think you are lazy.

Is this for an acquisitions role for CRE or for equity for CRE?

May 18, 2018

Acquisitions at a developer.

May 18, 2018

Hahaha I know what company it's for, I did the same test with the slides. It really annoys me that they ask you to take a test before speaking with you at all.

I'm not really sure what they are looking for in terms of assumptions but remember the debt, depreciation, and also reinvesting your cash flows from the rental property.

May 18, 2018

I know exactly...I also did the test. Haven't heard anything back from them. Incredibly annoying due to time commitment. Have you heard back? Curious what they are looking for.

May 18, 2018

I didn't hear anything so I emailed the guy asking if he had a chance to look at it. He just said they decided to go in a different direction. I thought my deck and assumptions were pretty good but didn't get any feedback. A waste of time really, considering almost no other company is going to ask for that before a phone interview.

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May 18, 2018

Such BS. At least you got an email back.

Most Helpful
May 19, 2018

It's really a douche move to ask someone to take a test/do a project and then not give any type of feedback if you don't get the gig. I give an assessment but I only do it after I've done a phone interview and met in person. Then I give constructive feedback, it's only fair. You probably don't want to work with that group anyway, if they are that inefficient during the hiring process (which is really straightforward) then who knows what goes on in their day to day/team.

    • 2
May 20, 2018