This model has been completely overhauled as of March 2021.
The template now allows the user to enter assumptions for up to 40 MHPs and/or Multi-family acquisition projects and see the results on the same timeline. Separate inputs can be entered for debt/equity/acquisition costs. There is also an option for renovation/construction and a separate LTC if there is debt in the given deal.
For revenue, there are inputs to define max lot/unit count, weighted average lot rent, rent growth (year 2-4) and a separate rate for stabilized growth, starting occupancy, and occupancy growth/max occupancy at stabilization. These are configurable for all 40 MHPs individually.
Global assumptions include the initial loan terms, interest only period if applicable, an option for ReFi at a given year after the initial loan, the terms on the Refi, the cap rate for valuation basis so that the ReFi LTV can be used to calculate the new loan amount, and all of these inputs will apply to each Mobile Home Park operation individually based on when the given start month occurs. The loan terms/refi logic will be the same for all operations that have marked ‘yes’ for debt. Having a ReFi exist is also optional on a global view.
The model goes out for a max period of 16 years with monthly and annual views. The exit month can be defined in any month and at that month, all operations are sold per a defined exit cap rate and all existing debt is repaid. There are inputs for any possible prepayment penalties, seller fees, and other loan fees.
Each individual park will have inputs for its relevant operating expenses / management fee if applicable. Expenses will grow at a determined annual rate.
3 separate cash distribution waterfalls were connected to the final equity requirement and available cash distributions. They stand on their own and are designed for the user to see all resulting IRR/equity multiples for the sponsor/investor at one time and include:
1) IRR hurdle based waterfall distribution (3 hurdle rates)
2) Preferred Equity waterfall (hard)
3) Preferred Return waterfall
There is a return table as well as plenty of visuals so that all aspects of the project can be understood more easily. Note, this can be used to look at a single acquisition/new construction project or many at one time. It can also be used in multi-family acquisition modeling as the revenue/expense and startup cost/exit assumptions are very similar.