Real Estate Excel Model
Originally published: 21/11/2016 15:51
Last version published: 23/05/2017 15:15
Publication number: ELQ-60409-2
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Real Estate Excel Model

A Real Estate Financial Model where new property owners purchase their houses outright

Description
A few words about the model:

1/ It was for a town house project in Central America where the new owners buy their properties outright

2/ In real estate projects the use of proceeds is particularly important in order to clarify when the developer is getting their return (after the lenders being preferred)

3/ This project has a more involved debt structure than the last model (which was for a startup); there is senior debt and mezzanine debt, which has an interest component and an equity participation component (if it was a business model I would have added a current portion of mezzanine debt to reflect a repayment schedule)

4/ I hate to rebuild models for new assumptions so I built this model so you could easily change the construction time to build a town house and the time to sell the unit by just changing one cell (G47 and G48 respectively on the Assumptions tab); mostly I was concerned about a slow down in the market affecting sell through

5/ Cash flow is managed by draw downs and repayments on the debt schedule under the construction loan; personally I find it confusing to use the cash flow statement to manage cash

- Robert Hacker, www.sophisticatedfinance.typepad.com

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