How complex is the underwriting of a property for an acquisition analyst? Do most firms have their own proprietary system? I have seen case studies involving tranches of debt and multiple spreadsheets in Excel? How much is just using precedent transactions?
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Every good acquisition shop will have their own underwriting model so you won’t have to build anything from scratch but you’ll need to know how the assumptions are flowing through the workbook.
Some of the case studies in the breaking into Wall Street have complex excel spreadsheets. I feel like its an overkill. Do you really have to develop multiple assumptions to realize that you want to do 65% debt and 35% equity?
It can be useful to compare how the returns are impacted with a higher or lower LTC. Some people do this by just toggling the LTC in the model, but I can see how it would be useful to look at them side by side.
So no, you don't have to, but someone you work for may want to see it someday, so it's good to know how.
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