Case Study: One-Page Multifamily Portfolio Underwriting Model

Our client had a common need. They wanted to quickly review portfolio deals using information gleaned from a broker’s marketing package, while updating assumptions with respect to rents, growth rates, occupancy, and more. But, they didn’t want detailed rent roll analyses, complex debt assumptions, investor waterfalls, or other features that many of our other real estate underwriting models include.

The problem is that most underwriting models add significant levels of complexity to individual asset-level underwriting and then only once the property-level model is complete, do they combine the model to allow for portfolio underwriting. The assumption is usually that a client who is underwriting a portfolio knows almost everything about the property and financials. In this case, the client wanted to be able to do a quick 10-year discounted cash flow (DCF) analysis with limited information and be able to quickly add/remove properties on the fly without an extensive setup or opening and closing multiple files.


The CREModels Solution

CREModels innovative solution started with a single-sheet model which was print-ready with custom branding and graphics. Then, as we worked closely with the client to perfect this model, we optimized the layout, assumptions, and KPIs specific to their needs. Once the single-sheet model was complete, we were able to create a one-page multifamily portfolio underwriting spreadsheet in the same workbook which easily drew from any number of the individual property worksheets. This allowed the client to underwrite each individual property and a portfolio of any number of properties simply by dragging and dropping spreadsheet tabs. More importantly, because each property has its own underwriting worksheet, there’s no need to delete a property to remove it from the portfolio underwriting, simply drag that tab out of the portfolio analysis section. This allows the client to do very dynamic what-if analyses by evaluating different sets of properties in any given portfolio. Often, the client would choose to buy some, but not all of the offered properties, and this model allows them to interactively decide which ones are best and which to leave behind.

If you’d like to learn more about how CREModels can optimize your business process through innovative solutions such as this, fill out the form below or contact us today!

Related Topics:
Real Estate Financial Modeling & Analysis
Real Estate Modeling with Microsoft Excel®
Real Estate Underwriting Dashboards