Real Estate - Farm Development Model
This is an Excel-based analysis tool for the ground-up development, operation, and ultimate disposition of a Real Estate Farmland. This tool gives estimated costs for planting, growing, and harvesting various crops and estimated contribution margins and earnings.
The model is monthly in nature, and it is a 100% unlocked Excel file with fully transparent formulas that can be further tailored to suit the particulars of your transactions.
This template fits the definition of a professional tool. It is specifically built to analyze ground-up farm development opportunities.
It includes expandable budgeting, a robust operating cash flow module, and the ability to model a complex partnership waterfall structure.
The model allows the user to model up to 7 crop types, each with its own input needs, namely fertilizers, pesticides, insurance, etc.
Inputs such as company/Farm name, currency, starting projection period, and others are also customizable.
Model Options:
•Dynamic Monthly & Annual Cash Flow: to calculate the key investments metrics needed to determine the feasibility of the project and the overall value of a potential selling, the cash flow is calculated on a monthly basis;
•Because it is a developing project model, the forecast takes into account the fact that during the setup phase, there is no or limited revenue, and the Land/Start-up loan interests are capitalized;
•Dynamic financing: this model works backward to get the required amount and timing for Equity/loan funding, taking into account the capitalized interests and any operating shortfalls that are funded with both equity and debt;
•The model allows the user to set up four refinancing options: including interest-only period, loan-to-value, fixed or variable interest rate;
•Because the interest expenses are partially funded with debt, this can cause circularities issues in the model. The template includes a circularity breaker (toggle between on and off) to avoid it, this will "break" the circularity, and the errors will be flushed out;
•Equity Waterfall Model: the template provides a 3-tier Equity waterfall model, so the user can determine how much capital the limited partner and General partner will get and their respective rates of return. The waterfall also allows setting the investor cash flow monthly, quarterly, or annually.
The model included an integrated discounted cash flow valuation using the projected cash flow outputs;
The model allows the user to model 3 separate scenarios and compare them side by side.
Instructions
•The user only needs to input information into the cells formatted in the dark blue font in the Assumptions, Budget sheets, and the support schedules in the Financial Statements Sheet. If the contents of a cell are colored black, it means that it is a formula.
•All inputs in the model are formatted in blue type. Any input that has a suffix or Prefix such as "/month", "Year", or "bushels", and so after/before the numeric value is custom formatted to display that text suffix/prefix. You only need to enter NUMBER VALUES in those cells. Do not re-type the text suffix -- it will corrupt the calculations or crash the model altogether.
•The template is provided with information from a hypothetical property for demonstration purposes that must be erased for a real property valuation;
•The template is provided with the iterative calculation mode active and calculation as automatic except for data tables whose data are only updated after the saving of the workbook;
•The investment summary sheet provides an overview of the property based on several key metrics and a printable "pitchable" report;
•In the Input sheet, the user can define the majority of the drivers, and along with the budget sheets are the only sheets the users need to input information;
•The maximum horizon for this model is ten (10) years.
