Simple 3-Tier Waterfall Model
Originally published: 15/02/2021 09:09
Last version published: 15/02/2021 14:02
Publication number: ELQ-76125-2
View all versions & Certificate
certified

Simple 3-Tier Waterfall Model

Cash flow from a development or investment project can be split in a countless number of ways.

Description
Waterfall models in real estate projects are one of the most difficult concepts to understand. Cash flow from a development or investment project can be split in a countless number of ways. A waterfall is a method of splitting profits among partners in a transaction that allows for profits to follow an uneven distribution. The waterfall structure can be thought of as a series of pools that fill up with cash flow and then once full, spill over all excess cash flow into additional pools.

This Excel model contains 2 types of waterfall methods. The first method of waterfall distributes profits based on a pro rata basis between the investor and the sponsor, effectively sharing the risk between the two. On the other hand, the second method of waterfall distributes profits first to investors until they get back their capital and preferred returns, and then starts distributing profits to the sponsor, effectively minimizing the risk to the investor, and increasing the risk to the sponsor.

Inputs are always depicted with a yellow fill while calculations are depicted with white fill and black characters.

There is also a color coding for the various tabs of the model. Yellow tabs are mostly assumptions tabs, and light blue tabs are admin tabs (for example: the cover page).

This Best Practice includes
1 Excel and 1 PDF

Acquire business license for $30.00

Add to cart

Add to bookmarks

Discuss

Reviews

  • Be the first to review this Downloadable Best Practice

    Write a review

People using this Best Practice also downloaded


keyboard_arrow_leftkeyboard_arrow_right

More Best Practices from Big4WallStreet


See all
keyboard_arrow_leftkeyboard_arrow_right

Any questions on Simple 3-Tier Waterfall Model?

The user community and author are here to help. Go ahead!


0.0 / 5 (0 votes)

please wait...