real estate investment bank interview help

I am having trouble solidifying my answers to a real estate investment banking interview. I expect to the typical walk me through a DCF model, but am confused if I should relate it to a real estate DCF model since it's very different. Also, I have heard of some real estate related accounting questions which I would like to know some examples of...can anyone provide some?

 
Best Response

I'm not sure what the accounting questions would be; also, I'm not sure what differences on the DCF you're worried about. In my experience, RE DCFs are basically the same as for operating corporations, except easier (because no one worries about WACC, and because you never value the residual on a perpetuity--just assume exit at some cap rate).

Also, if this is a small RE IB, you should keep in mind that the business is basically a glorified brokerage--it's much more about selling than it is about super-complicated financial analysis.

I'd know as much as I could about the financing environment for real estate deals, and as much as I could about typical deal structures.

 

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