Officially took my very first modeling test for an interview yesterday. I think I bombed it. How much of a modeling test is more about the approach to actually nailing all of the inputs/calculations?
I thought I understood how to do simple MF modeling (in reality I do). Don't get me wrong, I know the formulas, how to set it up, make it dynamic, format it, make it pretty, all that. Excel is not the issue.
TLDR: However, what I don't have experience/repetitions doing is creating my own assumptions. They were not give. How do you underwrite your assumptions?
Even if I completely F'd up the assumptions, I feel like I can walk through the model, how I got to everything, why I included certain things/left others out.
The full picture:
I was given a bunch of historical information spanning about 30 Excel and PDF documents that I had to parse through and organize into files. They included: rent rolls, occupancy data, operating statements, property information (location, floor plans) vendor service agreements, vacancy reports, only loan documents to figure out the debt financing, etc. The test was to put together the historical information and then produce a 1 year pro forma.
Once I figured out what was what, I laid out my model with the following tabs: 1) Projection 2) Historicals 3) Rent Roll Summary 4) Rent Roll Analysis 5) Amort. Schedule. I did all the back end calculations in tabs 2-5 and rolled everything into tab 1 with a property summary at the top that had the year 1 pro forma with the typical line items from income all the way through NOI, debt financing, cash flow after debt, and I inserted a risk section for the loan balance, DSCR etc, Debt Yield, etc.
How I created the assumptions:
Since I was given historical data (2011- 9/2014) I took the average increases/decreases of the historical data and used that as the average as the % increase for the next year. Was I close at all?