Leveraged Breakdowns

Real Estate LBO Model

Catch-Up Waterfall, Part Three: Introducing the Waterfall

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 …

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Preferred Note Case Study, Part Six: Conclusion

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 …

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Real Estate Private Equity Model 101: The Waterfall

When you hear talk about the waterfall, understand that this simply means how the profits are divided between the parties involved in the deal. Generally this means how profits are split between the GP (General Partner, your employer) and the LPs (limited partners, or investors in the deal). But in some instances, there may be …

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A Beginner’s Guide To Commercial Leases, Part One: Income

The terms and conditions within a commercial lease can make or break a deal. Analysts must fully understand each of these terms if they want to build practical and effective LBO models. The lingo used can initially be confusing, but with practice you’ll get the hang of it. Private equity real estate returns for stabilized …

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Real Estate Investment Case Study Challenge #1: Solution Step 3

Introduction This is the third and final step in solving the inaugural real estate investment case study challenge. This solution teaches you how to build a typical real estate private equity model used in one-hour on-site case studies. This is a basic model that you should be able to build from scratch without referencing anything …

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Real Estate Investment Case Study Challenge #1: Solution Step 2

Introduction This post is step two in our solution to the very first real estate investment case study challenge. This case is exemplary of a one-hour, on-site, asset-level real estate private equity interview case study. If you haven’t yet, go back to the original prompt and then the solution step one before reading this post. …

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Real Estate Investment Case Study Challenge #1: Solution Step 1 of 3

Introduction This post covers the solution to our inaugural real estate investment case study challenge. You may download the solution here. Submissions were due April 30, 2019. Because practice makes perfect, you should first actually try solving this simple real estate investment case study on your own. The original forum thread is a great resource …

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