Wall Street Prep
Modeling Multifamily Real Estate

Modeling Multifamily Real Estate

Designed for investment banking, PE and real estate investment professionals, you will learn how professionals underwrite and analyze multi-family properties in order to evaluate investment opportunities and drive valuation.

Real World "On the Job" Multifamily Real Estate Modeling

  • How do private equity and real estate professionals build financial models to analyze whether to invest in a multi-family property?
  • What are the key inputs, forecasting drivers, and outputs in those models?
  • In this online, video-based 2-hour course, you will learn how a real multi family model is constructed and used to generate key investment insights.

What You'll Learn

Part 1
  • Using a typical offering memorandum (OM) to extract key detail used in the model
  • How historical financials drive the pro-forma
  • Projecting top-line revenue performance (effective vs. gross rent)
  • Modeling occupancy/vacancy loss, non-revenue units, and uncollectible rent assumptions
  • Getting to NOI: Projecting the most common operating expenses
  • How to underwrite capital expenditures (defensive vs. offensive)
  • How to calculate levered returns
Part 2
  • Modeling the key equity and debt metrics in mult-family real estate (Yield-on-cost, Cash-on-cash yield, DSCR, and debt yield)
  • Understanding value allocation
  • Modeling Sources & Uses
  • Constructing the NOI and Returns Summary tables
  • Sensitizing key outputs to frame purchase price ranges for a multi-family real estate property
  • Typical return profile for a multi-family
  • Financial due diligence: Sales comparable and market surveys

Course Samples

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Model Introduction and Inputs
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Revenues and Expenses
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Sources And Uses

Wall Street Prep’s Modeling Multifamily Real Estate is used at top financial institutions and business schools.

Prerequisites

This course does not assume a prior background in Real Estate. However, this course is taught at a fast pace and those who enroll should have an introductory knowledge of accounting (e.g. interaction of balance sheet, cash flow, and income statement) and proficiency in Excel. Students with no prior background in Accounting should enroll in the Accounting Crash Course. Students with limited experience using Excel should enroll in the Excel Crash Course.

Course Extras

  • Taught by bankers

    Our instructors are former investment bankers who give lessons real-world context by connecting it to their experience on the desk.

  • Used on the Street

    This is the same comprehensive course our corporate clients use to prepare their analysts and associates.

  • Macabacus Excel Plugin

    6-month free access to the full version of Macabacus — an all-in-one suite of time-saving tools designed for people who build financial models in Excel.

  • Free Unlimited Access to the WSP Support Center

    Receive answers to questions, free downloads, and more from our staff of experienced investment bankers

Course Syllabus

Creating a Multifamily Model
1 Multifamily Real Estate Introduction 0:56
2 What Is Multifamily Real Estate? 4:40
3 Model Introduction and Inputs 5:58
4 Historical Financials 5:06
5 Defining Effective Rent 2:56
6 Defining Operating Expenses 4:08
7 Drivers 10:51
8 Renovations and Market Rents 4:53
9 Revenues and Expenses 6:24
10 Capital Expenditures 6:34
11 Acquisition and Disposition 3:36
12 Financing 5:50
13 Calculating Levered Cash Flow And Returns 4:17
Multifamily Investment Analysis
14 Defining Key Metrics 4:23
15 Sources And Uses 4:53
16 Annualizing Cash Flows 2:51
17 Modeling Key Metrics 9:04
18 Transaction Summary 14:46
19 Revenue and Expense Summary 7:48
20 Real Estate Risk & Return Spectrum and Target Deal Profile 3:15
21 Market Comparables 5:52
22 Determining A Purchase Price 7:16
23 Conclusion 1:32
Multifamily Modeling Q&A
24 Are Models Always Driven By Historical Financials? 0:38
25 Can You Clarify the Difference Between Loss-to-Lease and Concessions? 0:58
26 How Do You Keep Track Of All The Changes and Their Impact on the Model? 1:41
27 What Are The Most Common Modeling Errors? 2:41
28 Are Revenue And Expense Line Items the Same for All Properties? 1:11
29 How Long Should it Take To Underwrite a New Property? 1:14
30 How Often Do You Build Your Model From Scratch? 1:43
31 How Much Detail Do Projections Require? 0:44
32 What Are Common Adjustments You Make to the Model? 2:47
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