Real Estate - Multi Family Property Acquisition Model

This is a fully functional, institutional quality and dynamic real estate pro-forma model. It was set up with the guidance of a real estate expert. This is a powerful model, yet, very user-friendly that will provide a framework to calculate the monthly and yearly income during the hold period of a real estate investment (multifamily property), with renovation (after purchase) and selling options.

Model Structure

1. This multifamily financial model includes 11 tabs;

2. The investment summary sheet provides an overview of the property based on several key metrics;

3. The revenue, construction budget and expense sheets are used as calculation tabs to support the monthly and yearly cash flow projections;

4. The debt tabs provides the projections for the acquisitions and refinancing loans on monthly basis;

5. Value-add options are found in the scenarios modeling tab, where the user can set up different scenarios based on the variation of key inputs (i.e. rent growth, expenses variation, Exit Cape rate, etc)

6. After modeling the different scenarios the user can make comparisons between them side-by-side on the Scenario output Sheet (the sheet is prepared for printing);

Instructions

• The user only needs to input information into the cells formatted in dark blue font or in the drop down menu. If the contents of a cell are colored black, it means that is a formula.

• The worksheets are protected so that only the appropriate cells can be manipulated. You will need to unlock the worksheets (no password needed) to ungroup or alter the equations;

• The template is provided with information from a hypothetical property, for demonstration purposes, that must be erased for a real property valuation;

• • To arrive at a sales value this model is designed to capitalize the NOI of the 12 months subsequent to that of the disposition divided by the exit cap rate;

• • The terminal cap rate is selected on the "Investment Summary" worksheet and is applicable to the end of the hold period defined in the investment summary sheet;

• • The maximum horizon for this model is ten (10) years;

• The initial and refinancing loans amount are calculated after inputting the loan-to-value ratio in the summary sheet. The user can also set up an interest period only (in months), as well a rate index and a rate spread;

• For Revenue the user must provide the current rent in-place and the post renovation period rents. It's also possible to provide income per unit for other type of incomes, and an annual growth rate per year, applied to the rents in-place, post renovation rents and to the other incomes;

• For Construction Budget you will determine the budget for different categories;

• For expenses you will determine the current expenses (including property taxes), starting expenses in year 1 and then an annual growth rate per year,

• The scenarios modeling sheets provides four possible scenarios based on the Rent, Vacancy, Bad debt, Expense and exit Cap rate variance. The base scenario is defined by the inputs set on the Summary, Expense, Revenue, construction budget (so there is no need to change the inputs in the scenario modeling sheet).