Real Estate Financial Modeling - Create a Basic Model Fast from Udemy

What's inside

Learning objectives

Create a dynamic real estate financial model from scratch using microsoft excel.
Prepare for private equity real estate tests commonly encountered during interviews.

Develop essential excel modeling skills for real estate finance.
Gain a comprehensive understanding of real estate investment logic and process.

Create a dynamic real estate financial model from scratch using microsoft excel.
Prepare for private equity real estate tests commonly encountered during interviews.
Develop essential excel modeling skills for real estate finance.
Gain a comprehensive understanding of real estate investment logic and process.

Syllabus

What is the course, what will you learn, and who is the instructor?

Presentation of the course

Introduction and definitions

Introducing the aim of the course. The course is based on a real-life modeling test, the instructions of which are shared in the pdf attached. The video will define all terms included in the instructions such as Cap Rate, WALB, ERV and others.

Attached is also the final product, but I strongly encourage you to follow all the steps with me before downloading the Excel document.

Learn to set up all tenancy assumptions related to a real estate business plan

Learn to build the basic set of assumptions: Renewal assumptions, void, tenant incentives, ERV.

Learn to set up a monthly rental cashflow for each tenant of the schedule. Includes a simplified version of the IF() function and an easy way to implement rent indexation using the YEAR() function.

Learn to model new potential tenants, depending on their lease start date

Modeling rent free periods using the AND() function

Adding refurbishment costs, a.k.a. Tenant Incentives (TI's)

Adding void costs, using the same formulas as before

Adding PM fees, which are based on the Rental Income and are at least equal to a lump sum. Here we use the MAX() function.

Simply adding the letting fees

How to calculate the acquisition price of a building based on a cap rate or a net initial yield, and the type of deductions that should be considered

Calculating the acquisition price using Cap Rate or NIY. Understanding the difference between the two and how purchasers' costs are deducted in each case.

Calculating and defining the WALB (Weighted Average Lease to Break) at exit. Using the functions YEARFRAC() and SUMPRODUCT(), as well as the famous INDEX(MATCH()).

Calculating the exit value of an investment depending of the year of sale. We will use the functions SUMIF() applied using a condition and INDEX(MATCH()).

Learn to build a cashflow table from scratch and link it to all the assumptions

Creating the backbone of the CF modelisation and connecting it to all the assumptions previously built.

Calculating all the main returns KPI. IRR is calculated using the XIRR() formula, Equity Multiple (EM) using the SUMIF() function applied with condition, and CoC is a combination of AVERAGE(), MIN() and MAX() functions.

Building a leverage scenario including debt withdrawal, amortisation and bullet repayment upon sale.

Calculation of the leveraged returns using the same method as before.

Creating sensitivity tables to evaluate the impact of 2 inputs on the returns.

Learn some quick tips to be able to model faster using shortcuts, smart functions and navigation tools.

Functions

Navigation Shortcuts

Keyboard Shortcuts

Here you can find an exercise to help you train your newly developed modelisation skills

You can train your newly acquired skills on this modelisation test, good luck !

You can also find here the final model, that you can compare to your own.

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Uses a real-life example encountered in Private Equity Real Estate interviews, giving learners a competitive edge in securing their dream job

Teaches how to create a dynamic real estate financial model from scratch using Microsoft Excel, a core skill for finance professionals

Develops essential Excel modeling skills for real estate finance, which is highly relevant to industry standards and practices

Requires learners to use Microsoft Excel, which may require a separate purchase or subscription for those who do not have it

Focuses on creating financial models using Microsoft Excel, which is a standard tool in the real estate finance industry

Includes an exercise to help learners train their newly developed modelisation skills, reinforcing practical application

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Real Estate Financial Modeling - Create a Basic Model Fast with these activities:

Review Real Estate Finance Terminology

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Familiarize yourself with key real estate finance terms to better understand the course material and accelerate your learning.

Browse courses on Cap Rate

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Create a glossary of key terms.
Find definitions and examples for each term.
Test your understanding with flashcards.

Create a Real Estate Modeling Resource Library

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Improve your efficiency by compiling a collection of useful resources, templates, and shortcuts for real estate financial modeling.

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Gather Excel templates and formulas.
Collect relevant articles and websites.
Organize the resources in a central location.

Read "Real Estate Finance & Investments" by William Brueggeman and Jeffrey Fisher

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Study a comprehensive textbook on real estate finance to gain a deeper understanding of the underlying principles and concepts.

View Real Estate Finance & Investments ISE on Amazon

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Read assigned chapters before each module.
Take notes on key concepts and formulas.
Work through the example problems.

Four other activities

Expand to see all activities and additional details

Show all seven activities

Practice Excel Modeling Exercises

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Sharpen your Excel modeling skills by completing practice exercises that simulate real-world real estate scenarios.

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Find or create sample real estate data.
Build models for different property types.
Compare your results to solutions.

Read "The Complete Guide to Real Estate Finance" by Jack Cummings

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Study a practical guide to real estate finance to gain insights into financing options, investment strategies, and risk management.

View Real Estate Finance and Investment Manual on Amazon

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Read assigned chapters after each module.
Take notes on financing options.
Analyze the case studies.

Create a Real Estate Investment Case Study

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Solidify your understanding of real estate financial modeling by developing a comprehensive case study of a real-world investment opportunity.

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Select a real estate investment opportunity.
Gather relevant data and assumptions.
Build a financial model to analyze the investment.
Present your findings in a written report.

Build a Sensitivity Analysis Dashboard

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Enhance your modeling skills by creating an interactive dashboard that allows you to quickly assess the impact of different assumptions on investment returns.

Show steps

Identify key assumptions to analyze.
Create a dashboard in Excel.
Link the dashboard to your financial model.
Test the dashboard with different scenarios.

Career center

Learners who complete Real Estate Financial Modeling - Create a Basic Model Fast will develop knowledge and skills that may be useful to these careers:

Real Estate Analyst

A Real Estate Analyst plays a crucial role in evaluating property investments and market trends. This role often involves creating financial models to assess property performance and potential returns; this course provides a practical approach to financial modeling using real-life examples. The course's focus on creating dynamic models, calculating KPIs such as IRR, and understanding lease structures directly enhances an analyst's ability to perform these tasks. Aspiring analysts should take this course to gain hands-on experience in real estate modeling and to prepare for modeling assessments typically encountered in job interviews.

See salaries and explore the career path for Real Estate Analyst

Investment Associate

An Investment Associate is involved in the process of identifying, evaluating, and acquiring investment opportunities, typically within real estate. This course helps individuals in this role by providing essential real estate modeling skills using Microsoft Excel. By teaching techniques to model rent cashflows, calculate acquisition prices, and assess returns on investment, this course helps an investment associate confidently evaluate potential real estate deals. The course's focus on real-life examples and practical application makes it a useful choice for those aiming to advance their skills in real estate investment.

See salaries and explore the career path for Investment Associate

Portfolio Manager

A Portfolio Manager oversees the performance of a collection of real estate investments. This course will be useful for this role because it provides instruction on financial modeling for real estate, including valuation techniques using cap rates and net initial yields. Portfolio managers need to understand cash flow models. This course provides exactly that, in addition to calculating key performance indicators. It would be particularly valuable for portfolio managers that want to refine their modeling techniques and accelerate their workflow.

See salaries and explore the career path for Portfolio Manager

Real Estate Acquisitions Manager

A Real Estate Acquisitions Manager is responsible for sourcing and acquiring new properties for investment. This role requires a deep understanding of financial models to assess the feasibility of potential acquisitions, and this course will be useful. The course teaches cash flow models, valuation based on cap rates, and the calculations of key performance indicators. The course's focus on real-life modeling exercises will help a real estate acquisitions manager gain practical experience in evaluating investment opportunities. An acquisitions manager looking to make data-driven decisions, and to excel in this field, should take this course.

See salaries and explore the career path for Real Estate Acquisitions Manager

Financial Modeler

Financial modelers create detailed models of a company's financial performance. This course is highly relevant for financial modelers who are focused on real estate. The course provides comprehensive education on using Microsoft Excel to create cash flow models, calculate key performance indicators, and analyze investment scenarios. The course's emphasis on hands-on exercises and real-life examples ensures a financial modeler can adeptly apply these skills. Those wishing to refine their modeling techniques will find this course particularly valuable.

See salaries and explore the career path for Financial Modeler

Real Estate Underwriter

A Real Estate Underwriter evaluates the risk associated with a real estate loan or investment. This role is greatly assisted by the ability to build real estate financial models. This course provides instruction on creating these models from scratch, which will allow an underwriter to make appropriate decisions about the financing of a property. These models allow underwriters to assess cash flows, potential return, and other vital data. Underwriters seeking to sharpen their modeling skills, and thereby improve their risk assessment, would benefit from this course.

See salaries and explore the career path for Real Estate Underwriter

Property Development Analyst

A Property Development Analyst researches and analyses the financial feasibility of new construction or renovation projects. This course is useful for property development analysts because it focuses on building financial models that are applicable to real estate projects. The course allows analysts to learn how to create dynamic models, calculate investment returns, and understand the impact of debt financing. By taking this course, a property development analyst can improve their ability to assess the financial viability of potential development projects, informing critical decisions at all project stages.

See salaries and explore the career path for Property Development Analyst

Asset Manager

An Asset Manager works to maximize the value of a portfolio of real estate assets. This course may be useful for an Asset Manager because it focuses on real estate financial modeling. The course's emphasis on creating comprehensive models, understanding cash flow, and evaluating investment performance can help asset managers improve their decision-making. The course's hands-on approach and real-world examples may further assist an asset manager in their daily responsibilities.

See salaries and explore the career path for Asset Manager

Commercial Real Estate Broker

A Commercial Real Estate Broker assists clients in buying, selling, or leasing commercial properties. While this role is primarily client-facing, an understanding of financial modeling helps brokers communicate the value of a property to clients. This course may be helpful for brokers who want to enhance their analytical skills when advising clients. The knowledge of cashflow models and return calculations can improve their ability to advise clients on investment decisions, and to close more deals, as a result.

See salaries and explore the career path for Commercial Real Estate Broker

Real Estate Consultant

A Real Estate Consultant provides expert advice on real estate matters to clients, including investment strategies. This course may be useful for a real estate consultant as it focuses on developing skills in financial modeling within the real estate sector. The course also covers key real estate metrics such as cap rate, WALB and ERV. Understanding a property's financials, as explored in this course, will likely improve a consultant's analytical abilities. The course may also help consultants present more compelling recommendations to their clients.

See salaries and explore the career path for Real Estate Consultant

Financial Analyst

A Financial Analyst provides analysis and insights into the financial performance of a company or an investment. This course may be useful for financial analysts who want to specialize in real estate. The course focuses on building real estate models, including calculation of main return KPIs. The course uses Microsoft Excel, a key tool for financial analysis. This course may further improve the financial analyst's capacity to assess investment performance and make data-driven recommendations.

See salaries and explore the career path for Financial Analyst

Investment Banking Analyst

An Investment Banking Analyst works on various financial transactions, including mergers and acquisitions, and capital markets. This role can be varied, but sometimes requires real estate knowledge. This course may be useful for investment banking analysts who wish to gain exposure to real estate modeling. The course provides a foundation in how to construct real estate models in Microsoft Excel, covering vital topics such as cash flows, return calculations, and debt leverage scenarios. This might help the analyst to work with clients in the real estate sector.

See salaries and explore the career path for Investment Banking Analyst

Private Equity Analyst

A Private Equity Analyst helps assess and manage investments in private companies. This course may be useful to a Private Equity Analyst who wants to learn more about real estate modeling. The course provides a practical approach to financial modeling using real-life examples, like those seen in private equity real estate interviews. The course also explores important metrics used in evaluating real estate investments, such as internal rate of return, equity multiple, and cash on cash return. This would be useful for a private equity analyst who interacts with real estate investments.

See salaries and explore the career path for Private Equity Analyst

Data Analyst

A Data Analyst collects, processes, and analyzes data to derive insights and inform decision-making. This course may be useful to a Data Analyst who wishes to apply their skills in the real estate sector. The course provides a comprehensive overview of real estate financial modeling, and it requires working with data and calculations in Excel. The course may help a data analyst apply their skills to the real estate sector, and provide useful support for financial decisions.

See salaries and explore the career path for Data Analyst

Junior Accountant

A Junior Accountant supports the finance department by performing accounting tasks and preparing financial records. This role is typically less focused on financial modeling. However, this course may be useful for a Junior Accountant who wishes to understand the financial underpinnings of real estate investments. The course provides training on creating financial models and analyzing return on investment. This may be useful for an aspiring accountant with ambition to work in the real estate sector.

See salaries and explore the career path for Junior Accountant

Reading list

We've selected two books that we think will supplement your learning. Use these to develop background knowledge, enrich your coursework, and gain a deeper understanding of the topics covered in Real Estate Financial Modeling - Create a Basic Model Fast.

Real Estate Finance & Investments ISE

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Comprehensive resource on real estate finance and investments. It covers a wide range of topics, including property valuation, mortgage markets, and investment analysis. It is commonly used as a textbook in real estate finance courses and provides a solid foundation for understanding the concepts covered in this course. This book adds breadth to the course by covering a wider range of topics.

Real Estate Finance & Investments ISE

Paperback

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Real Estate Finance & Investments ISE

Kindle Edition

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Real Estate Finance and Investment Manual

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Provides a practical guide to real estate finance, covering topics such as financing options, investment strategies, and risk management. It offers real-world examples and case studies to illustrate key concepts. This book is valuable as additional reading to provide more depth to the existing course. It is helpful in providing background knowledge on financing options.

Real Estate Finance and Investment Manual

Paperback

Real Estate Financial Modeling - Create a Basic Model Fast

What's inside

Learning objectives

Syllabus

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Activities

Career center

Reading list

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