loader image

Leveraged Breakdowns

Menu
$0.00
0
logo
logo
Menu

Lev

Catch-Up Waterfall, Part Four: Asset Management Fees and Preferred Distributions

Leave a Comment / Real Estate Private Equity Interview Case Study, Real Estate Private Equity Interview Process / By

Introduction This post is part of a deep dive into catch-up waterfalls, which can show up in the more technical portions of the real estate private equity interview process. Last post, we left off with the waterfall schedule below. This post will dive into the details of the asset management fee and the preferred distributions. […]

Catch-Up Waterfall, Part Four: Asset Management Fees and Preferred Distributions Read More »

Catch-Up Waterfall, Part Three: Introducing the Waterfall

Leave a Comment / Real Estate LBO Model, REPE Case Study / By

Introduction The previous post answered the first question of the prompt, “what are the gross returns of this investment?” by building a simple real estate LBO model. This post will begin our journey to answer the second question of this REPE case study, “what net return should the LP expect to earn?” Of course, net

Catch-Up Waterfall, Part Three: Introducing the Waterfall Read More »

Catch-Up Waterfall, Part Two: Modeling the Gross Returns

Leave a Comment / Career In Real Estate Private Equity, REPE Interview Questions / By

Introduction Catch-up waterfalls are a common staple throughout a career in real estate private equity. And comprehension thereof is frequently tested in REPE interview questions. Luckily, we’re here to help! The first post in this series introduced the case prompt. Now, this post will seek to address question one in that original prompt. Namely, this

Catch-Up Waterfall, Part Two: Modeling the Gross Returns Read More »

Catch-Up Waterfall, Part One: The Prompt

Leave a Comment / Real Estate Private Equity Career Path, real estate private equity guide / By

Intro This case study will focus on building a catch-up waterfall. Catch-up waterfalls will be fairly common throughout your real estate private equity career path. The other common waterfall is promote-based, which we build live in the REPE Starter Kit. Private equity analysts and associates must often model waterfalls, so pay close attention. Keeping it

Catch-Up Waterfall, Part One: The Prompt Read More »

Preferred Note Case Study, Part Six: Conclusion

Leave a Comment / Real Estate LBO Model, REPE Case Study / By

Introduction This is the final installment of the preferred note REPE case study. You should begin at part one, otherwise this section won’t make much sense. But if you’re joining us from part five, we’re going to improve the sensitivity table that we ended with. This sensitivity table looks great, but let’s expand it. I’m

Preferred Note Case Study, Part Six: Conclusion Read More »

Preferred Note Case Study, Part Five: Sensitivity Tables

Leave a Comment / Career In Real Estate Private Equity, REPE Career / By

As the old saying goes, expected returns increase as you move up in the capital stack. So why would anybody ever invest anywhere but the top of the capital stack with the highest returns? More specifically, why would the preferred investor accept a 16.3% LIRR when the common would receive 17.8%? The quick answer is

Preferred Note Case Study, Part Five: Sensitivity Tables Read More »

Preferred Note Case Study, Part Four: Equity Schedules

Leave a Comment / real estate private equity interview questions, REPE Career / By

In the prior post, we built the cash flow waterfalls for this preferred note case study. If you’re just coming to this article, I suggest you begin at part one (this is part four). This post will focus on the preferred equity and common equity schedules. These schedules drive almost all of the waterfall logic

Preferred Note Case Study, Part Four: Equity Schedules Read More »

Preferred Note Case Study, Part Three: Distribution Waterfall

Leave a Comment / real estate investment case study, Real Estate Private Equity Case Study / By

Real estate private equity case studies often ask you to model cash flow waterfalls. To the uninitiated, waterfalls can seem complex and obscure. But really, waterfalls just determine how investors split the pie when the money comes back around. Pay close attention here, because the skills taught in this post will apply to most every

Preferred Note Case Study, Part Three: Distribution Waterfall Read More »

Preferred Note Case Study, Part Two: Levered Cash Flows

Leave a Comment / Real Estate Private Equity Interviews, real estate private equity skills / By

When we model this preferred equity structure, we first need to consider the joint venture. The joint venture is the genesis of the cash flows, after which the preferred and common will split their share accordingly. So what does this joint venture look like? Pay close attention – cash flow modeling is one of the

Preferred Note Case Study, Part Two: Levered Cash Flows Read More »

Preferred Note Case Study, Part One: The Question

Leave a Comment / real estate investment case study, Real Estate Private Equity Case Study / By

Introduction This real estate investment case study will challenge your ability to model capital structure and a returns waterfall. With practice, you should be able to complete this category of case study within 30-45 minutes. This post will introduce you to the question and go over some key terminology. At the end, we’ll challenge you

Preferred Note Case Study, Part One: The Question Read More »

Scroll to Top