Case Studies & Modeling Tests: How Exactly Are They Administered?

ThrowawayUnit's picture
Rank: Monkey | 30

I'm curious to hear everyone's experience with modeling tests/case studies while trying out for Real Estate gigs. Two main questions I'm looking for:

1) What percentage of positions you interviewed for involved a modeling test? Did you notice a correlation between seniority level of the position or AUM of the shop and likelihood of giving modeling tests?

2) How exactly are most modeling tests administered? Are you emailed a prompt and expected to send back something complete within the next 24 hours or is it more like you're put in a room with a laptop and prompt and they say "okay, we'll be back in 20 minutes".?

Comments (13)

Jul 3, 2019

I'd say most firms have some sort of excel test if they are on the equity side. Brokerage and lending it's less likely to see a modeling test although plenty of places will still have them.

2) Both examples you listed happen.

I've had one where they sent me a partially completed file and told me to have it completed by tomorrow.

Another we had a pre-arranged time (eg 10am Sunday) when they emailed me the modeling test and I had to have it completed and emailed back 45 minutes later.

Another they sat me down at a PC and gave me some assumptions. Had to be done in an hour.

Some places will have you solve non-real estate excel problems to prove that you know how functions like index() and match() work

All of mine were multi family tests despite the shops not exclusively focusing on multifamily. Most will give you a sheet with some prompts, assumptions, metrics you'll need to calculate, and then you'll build it in excel from scratch.

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Jul 3, 2019

Out of curiosity, how hairy are the mock-deals they give you to work on? Are they throwing a lot of wrenches in the prompt like re-finances and expecting full waterfalls or is it moreso a lay-up to show you know how to build a proforma with ammortizing debt and backsolve into a target price/irr/em

Jul 3, 2019

More-so the latter. But these were all for jobs straight out of college or 6 months out of college. I've seen a Related case study that included a waterfall.

I know a top 5 PERE company that didn't do anything crazy like refinances / funding capex with additional equity. Most places I've heard of emphasize speed over complexity on the modeling test. Simple proforma but you've got 30-45 to do it.

Can't comment on places that are ultra competitive like Blackstone, Centerbridge, Apollo. I imagine that's where you'd see a crazy modeling test

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Jul 9, 2019

I did one at a mega PE fund named after a multi-headed dog who guards hell that did not include a waterfall but did have a lot of other tricks. I was given 3 hours to complete which I don't believe was near enough time to complete all of the sensitivity tables and extra analysis they asked for. The feedback I got was that my test went really well and all I did was build on the cash flows and the levered/unlevered IRR.

As for how it was given, I got a two-sided sheet of paper describing the deal/explaining what they wanted. To complete it, I was given a laptop with a blank excel file, no internet, and 3 hours alone in a conference room.

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Most Helpful
Jul 3, 2019

Hah, why did you make a "throwaway" account for this? These are fair questions.

ThrowawayUnit:

1) What percentage of positions you interviewed for involved a modeling test? Did you notice a correlation between seniority level of the position or AUM of the shop and likelihood of giving modeling tests?

Hard to put a number on it, but I'd guess 25%. In my experience, development positions are less likely to have them than finance positions because it's less of what you do day to day. Also, I would venture that the lower level the position is, the more likely you'll have a test. If you're an analyst and you spend your day in models, it's more relevant. For higher level roles, it's assumed you know what you're doing, and running the numbers yourself is less a part of the job.

ThrowawayUnit:

2) How exactly are most modeling tests administered? Are you emailed a prompt and expected to send back something complete within the next 24 hours or is it more like you're put in a room with a laptop and prompt and they say "okay, we'll be back in 20 minutes".?

One I remember well is Jamestown. I was given a sheet of paper with a scenario on it and was sat in a room with a computer with no internet for a half hour. The computer had an excel file that was formatted (colors/borders, not formulas) and I had to model the scenario in their format and then answer a couple of questions like "What is the Year 5 NOI?" or "If you sell in year 3 at a 5.5% cap rate, what is the target disposition price?" I modeled it in maybe 5-10 minutes, spent another 10 stressing out because it was way too easy (one page...stabilized asset...only annual cash flows instead of monthly...) and I was looking for a catch and quadruple-checking my formulas, and then eventually wandered around the office until I found the test administrator.

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Jul 10, 2019

Just curious, did you move forward in the process at Jamestown after the modeling test or no? I think they do some really cool projects even though I'm not in development.

Jul 10, 2019

I did, but after 3 rounds plus the test, they told me that my final interview was my last, only to reverse course and ask me to come back in to meet yet another person on the day that I got two other offers. Time kills all deals.

Also, my local office has the reputation of a place to work on amazing projects for two years and then get out while you still have your sanity. There are far more ex-Jamestown people here (that are really impressive people, mind you) than there are current Jamestown people.

Jul 4, 2019

Interviewed a few times over the year for mainly Investment or Development roles and 80% I have been has administered them, from high profile players to smaller boutique shops.

The most established company (75 desk count, 6B AUM) I interviewed for I was simply given an excel model in their office and didn't do anything more than a sum formula, made a graph and used goal seek. They had automatic calculations turned off on the sheet which I changed but I don't know if this was part of the test, when I brought it up at the end the insisted they just overlooked it but I couldn't be sure on if they were telling the truth. It's a pretty standout thing and they asked very Google'esque problem solving questions during the interview so wouldn't be surprised if it was intentional.

Another smaller shop (10 desk count, 1B AUM) just gave me the headline figures of a deal and asked I just start with a blank canvas, 4 hour excel test in their office on one of their computers. This is my favourite approach.

Someone else (8 dc, 1.5B AUM) asked me to send a model that I created from scratch. Told them I would send an nonfunctional model with changed assumptions (copy and paste as values) as anything worth sending was created on company time, privacy, yada yada etc.

Another company (15 dc, 3B AUM) that didn't administer a test just asked me what my favourite excel function is. Index/Match was a sufficient answer.

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Jul 5, 2019

My new job that I just accepted offer to did not require one.

I've taken 3 modeling tests during the process for other firms.

1st was a joke and it was for an Associate
Role. Had a phone screen with HR and at the end asked if I would be able to complete an Excel test by midnight if they sent it to me immediately afterwards. It was a joke and took me maybe 15 mins.

2nd was a final round case study and I was given a week. Had everything from cash flow to waterfall. After sending I had to come in and discuss my case study with the team. I was good contacts with the MD and got great feeds back but they ended up going with someone with more underwriting experience.

3rd was a final in person excel test for an institutional developer. It was really plug in formulas. I was given an hour and didn't even finish lol. It was definitely an easy test for most but I knew zero about development and didn't prepare well for it.

Jul 11, 2019
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