I am asked during this RE analyst interview to build a real estate model from scratch. My background is commercial banking and I am used to analyzing real estate deals from the lender side not the developer. The interviewer is generous I must say he’s giving me a few days to complete. However this model is for a ground up multifamily development. I have no prior experience building one. I can find models online but all very complexe to reproduce. How would you handle? Do you have model to share?

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Look on youtube RE model how to’s and mimic those step by step but with your case study and assumptions. Your model doesn’t have to be perfect, it just has to have the right “thinking” behind it such as why rents are increasing the way they are, returns analysis (IRR, Cash on Cash, Total Profits). Most importantly make sure you add a waterfall analysis as thats where the real cash is made in RE. Most of the time these take home models are meant to show the interviewer that you know the principles of RE and how it works, demonstrate your excel abilities, and presentation skills. The model doesn’t have to be perfect, the fine tuning comes after you get the job.

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Start simple - build a annual cash flow then trend it (construction funding + negative carry cash flow) then lease-up followed by stabilization. Run all the debt and return metrics

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If you still have time after this simple model (mostly straight-line), build a two tier JV waterfall. Pro-rata ownership (ex. 95/5) for the first hurdle to 10% leveraged IRR, then 90/10 (or a different split) thereafter. This should be enough to demonstrate your thinking and excel skill. Feel free to PM

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