Real Estate Fund Modeling
What the best method forhypothetical?
A) utilize the the 1, 3, and 5 yr average net return of the underlying operators
B) utilize assumptions of cash flow based on prefs and estimated appreciation of the underlying assets?
i've modeled both methods and with A (using net return) and B (using) the returns are within 15% of each other however the MOIC is very different. i also modeled in a refinance/recap of some sort in year 3 under method B. I know what i'm doing in application but am not an excel guru and am struggling to ensure i model the hypotheticals accurately to investors. any thoughts or feedback?