There is almost a guarantee you'll get this question if you are interviewing for a job on the principal side coming from Investment Sales / Debt Brokerage / Lending, and I feel that this question is harder to answer if you're not already in acquisitions. IE in lending we're focused on credit metrics / operator track record / financial wherewithal of borrower / Historical Financial Statements / demographics of MSA and sub-market. While some of those areas overlap with PE, we don't take as deep of a dive into comparable properties and our projections are less forward looking than a buy-side real estate company (when lending on stabilized properties).
So my question is if anyone has a go-to format for answering this question? Would be especially helpful if you had a way of doing so from the perspective of a lender / broker
Here is how I've been thinking of breaking it down:
-Transaction type (refinance, acquisition, construction take-out, credit facility)
-Overview of City
Financial and Demographic Metrics
-LTV/DSCR/NOI/Cap Rate / Expense Ratio etc.
- Median House Value / Median Income / Population Growth / Supply & Demand of Property Type
- Compare the above metrics to Comparable properties
Strengths and Weaknesses of Property
-Highlight weaknesses and why your team was okay with them
-Strengths are self explanatory
Outcome of Transaction
I feel like I'd just be throwing out information at an interviewer if I were to say these things. Is there a more fluid way to break down a deal? Should I talk more about my responsibilities even if they're largely the same on each deal? Appreciate any help on this