Real Estate Cashflow & Financial Modelling

If you already have an understanding of real estate finance and investment techniques, this is Euromoney Training course will enable you to develop your skills in analysing and structuring real estate deals. Skills and techniques will be demonstrated to assist in developing financial structures and evaluating the financial feasibility of investing in real estate. Case studies and worked examples will be used throughout the programme to enable you to apply these techniques to real-life. You will enhance your range of skills and techniques which will help you to make informed real estate financing decisions. How will this course assist? This 3-day course will assist you with structuring the finance and evaluating the financial feasibility of investing in complex real estate deals, you will cover: Building valuation models for investment and development Creating cashflow models for investment and finance Identifying, evaluating and managing the risk of investing in property Analysing the risks and returns of different financing structures Selecting the most appropriate financing structure for your deal Applying financial structuring techniques to existing investments Understanding how to structure mezzanine and JV deals Who should attend? Lending Bankers/Real Estate Finance Executives Analysts Financial Managers and Consultants Fund Managers Investment Bankers and Consultants Lawyers and Accountants Corporate Property Managers Property Fund Management Staff Property Analysts and Developers Real Estate Investors Insurance Professionals Valuers Leasing Executives Securitisation Executives
Day 1 Introduction Structure of the course Discussion of delegates’ objectives Getting started: best practice and presentation This session sets the scene for setting up the spreadsheet and ensuring spreadsheet integrity Standardisation Use of templates Modelling tips / best practice Audit and transparency issues Safeguarding intellectual capital Graphics and Presentation: Line, column and bar charts, creating dynamic charts, creating interactive models, building simple animation in spreadsheets including graphs and text boxes Property valuation formats Formulae and function for valuations and appraisals Valuing gross and net leases Calculating and comparing effective rents Applying different types of yield Understanding and analysing the components of yields Backing out market implied growth rates Global valuation techniques: income approach and cost approach Turnover rents Structuring a cashflow model Line by line build up of cashflows Typical cashflow issues Timing and frequency formats Growth and CPI indices Cap Ex and Op Ex Checking outputs for consistency Exit strategies and solving for transaction prices Graphing and presentation of outputs Case study: creating a cashflow model Day 2 Cost of capital techniques in real estate Use and calculation of discount rates Weighted average cost of capital Payback Using NPV and IRR and understanding limitations Buy or lease decisions Hold or leaseback structures Putting it into practice: developing a model buy, lease or leaseback Adding debt Applying typical banking covenants Using excel’s specialist financial functions Capital cover or income cover: techniques for sizing the loan Creating a geared cashflow Structuring for added value plays Reconciling borrower and lender objectives Extending the debt model The capital stack Mezzanine finance approaches Lookback IRR Mezzanine finance with profit-share Putting it into practice: extending the model adding mezzanine finance Day 3 Development appraisals Residual appraisals Identifying feasibility Presentation and use of graphs Development cashflows Revisiting risk issues Putting it into practice: developing a model development appraisals Development Finance Options for financing pre-let and speculative deals Forward sale and full forward funding Mezzanine finance for developments Putting it into practice: extending the model adding financing alternatives JV and private equity models Use of third party equity Ground rent and land lease calculations Using real options Priority of distributions Structuring the pref and promote Waterfall structures Putting it into practice: JV and profit sharing structures Course summary and close