Waterfall Model for Joint Venture Real Estate Project

Dynamic financial model for calculating cash splits to sponsors/investors based on various IRR hurdles getting reached.

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Video Tutorial:

This is a waterfall build that has been combined with a dynamic pro-forma real estate template. The cash flow available for split will populate into the waterfall model automatically.

You can adjust a bunch of assumptions that define the cash generated by the real estate pro-forma, including an exit value, rent increases, debt, and operating expenses / startup costs.

Every progressive hurdle that gets met means any future cash flows are split at the new promote % for the sponsor/investor.

I have added charts in order to clearly show how the hurdles effect the total cash returned for the project.

Note, Version 2 was recently added. It has logic to split cash flows in a secondary level (i.e. if the cash flow to the investor or sponsor goes to two other parties and they in turn have their own promotes based on the hurdles. Also, it functions by simply inputting the project cash flows per month as well as has included an equity multiple minimum for the investor.

Version 3 is the same as version 1, accept it allows the user to look at 5 different scenarios at once and see the resulting sponsor/investor cash flows and final IRRs.

 

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  • Avatar perfect

    great model

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