Delegates:

This course will benefit real estate professionals who are already familiar with Excel and financial models and who are seeking to enhance their ability to build financial models to analyse real estate investments.

Overview:

This 2-day intermediate course is designed to teach delegates modelling ‘best practice’ and how to build well-structured financial models. This course will be capped at a maximum of 8 delegates to ensure the most effective training. Familiarity with the common problems encountered when building financial models is assumed.

Learning outcomes:

Day 1

Golden Rules of Model Design

• Input, calculation and output areas
• Key rules to follow
• Design rules, model structure and set up

Building a financial forecast

• Objectives, structure and building the core of the model
• Sources of information
• Historic information, cleaning the numbers

Forecasting the Net Operating Income

• Rent forecast: Initial vacancy, multiple review dates, lease end, voids, second hypothetical lease, rent free
• Upwards only rent, step-up rents, step-up rents with initial vacancy
• Operating expenses: letting fees, service charges, service charge caps, void rates
• Capital expenditures: refurbishment and tenant fit out
• Purchase price including purchaser’s cost
• Forecasting sale price and cost of rent free

Day 2

Constructing the debt schedule – creating a debt waterfall

• Senior debt modelling
  • Interest Only
  • Constant Amortization
  • Constant Payment
  • Balloon Payments
• Mezzanine
• Problems of circular models

Scenarios

• Different methods to select scenarios – scenario manager, data tables

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