Comments on: Real Estate Financial Modeling (REFM): The Ultimate Guide, With Templates & Examples

By: M&I - Brian

M&I - Brian — Wed, 06 Oct 2021 00:01:47 +0000

We have our own Real Estate Financial Modeling course: https://breakingintowallstreet.com/real-estate-modeling/

By: Ignacio Antonio

Ignacio Antonio — Mon, 27 Sep 2021 14:26:24 +0000

Hello Brian,
My name is Ignacio and I’m writing this from Argentina. I enjoyed very much your article about Real Estate financial modeling. You see, I studied Economics, although I am currently shifting into Real Estate. I am looking for a course in REFM, perhaps a “certification” which is recognized in the industry. In this sense, I was wondering if you could recommend one, based on your knowledge and experience. I see there are lots of online platforms offering these type of courses and I’m trying to find one that is well acknowledged by employers and the industry, in general.
I look fwd to hearing from you.
Thank you for your attention and I appreciate your help.
Best regards,
Ignacio Antonio

By: M&I - Brian

M&I - Brian — Mon, 21 Jun 2021 00:39:15 +0000

In reply to W os. Yes, some loans are quoted like that, but this is a minor point, and this is a simplified model where 30/360 vs. the calculation here does not matter.

By: W os

W os — Fri, 18 Jun 2021 18:13:53 +0000

Is it not the case that most loans are quoted with an interest rate assuming a 30/360 interest rate, as opposed to the annual effective interest rate you are using here? Interested as to why you are using (1+Interest rate)^(1/N)-1, when it seems that most loans in the industry would be quoted assuming (interest rate)*(30/360) or (/12).

By: M&I - Brian

M&I - Brian — Wed, 07 Apr 2021 21:31:06 +0000

In reply to Brian.

With the IRR calculation, all that matters is the *interval* between cash flows. The standard IRR function assumes 1 year between each cell. So as long as the cash flows arrive one year after the acquisition, on average, then it’s fine.

If your point is that the cash flows do not all arrive at the end of year 1, yes, that is true, but adjusting the cash flows to arrive midway through the year makes a very small difference and isn’t usually worth the effort. We do sometimes use the mid-year convention in DCF analyses, but usually not when calculating returns.

By: Brian

Brian — Tue, 06 Apr 2021 20:54:30 +0000

I have a question on the IRR calculations in these models. I see this repeatedly.

IRR in excel assumes all equal periods, right? yet, every-time i see it, i see the acquisition equity as one cell, incoming rents for the 1st year in the 2nd cell. But these aren’t equal periods.

Since the 1st year is an equal period, shouldn’t the acquisition costs then be offset by the year 1 net income?

By: Siseko Nyathi

Siseko Nyathi — Fri, 05 Mar 2021 16:16:47 +0000

In reply to Dhirender Gaur. Just wanted to say I love this platform. To everyone who contributes to this, thank you for your existence!

By: M&I - Brian

M&I - Brian — Thu, 13 Feb 2020 19:07:49 +0000

In reply to Omar Moumneh.

No, but there is a development/opportunistic example here: https://mergersandinquisitions.com/opportunistic-real-estate/

By: Omar Moumneh

Omar Moumneh — Wed, 12 Feb 2020 19:51:06 +0000

hey , what would have an example for the 4th strategy ? buying building and pre sell ??

By: Tom Petracca

Tom Petracca — Sat, 18 Jan 2020 19:15:51 +0000

Nice job Brian!