Build-For-Rent Development Model

Everyone needs a house and every firm analyzing a build-for-rent community needs a good model with the horsepower to analyze various situations and simply summarize the economics of the deal. Here you go!

This financial model is specifically geared for a build-for-rent development deal and includes the following modules:

• Detailed Project Metrics: Summarizes the unlevered (without debt), levered (with debt), and structured (equity raised from other parties) return metrics.
• Project Metrics: A simplified project metrics page that hits on the key points including return metrics and timeline
• Project Inputs: This is the page that drives the model -- # lots, Tranche Interval (model assumes up to 9 tranches and up to 110 lots but can be easily modified), Construction Timeline, Sale Post Construction Finish, Construction Start, Exit Assumptions, Cost Assumptions, Rent Assumptions, NOI Inflation, Sales Price Inflation, Construction Cost Inflation, Construction and Permanent Financing, and Ownership Splits
• Comp Analysis: Insert sales and rent comps here along with competing projects under construction
• Project Cash Flows: Part of the guts of the model, this worksheet calculates the land closing, the construction costs, rents, and final exit. This page also includes the cash flows associated with construction and permanent loan financing and payoff. The model is currently only set to go to 60 months but can be easily modified.
• Equity Waterfall: This worksheet calculates the promotion to the general partner and the dilution to the limited partner based on the assumptions on the Project Inputs tab
• Structured Cash Flows: Sometimes, further structuring of the cash flows occurs resulting in a "double promote". The second promote often further benefits the general partners and creates a subset of limited partner cash flows. This module was included because the author structured a deal in which the land seller contributed the land in exchange for equity. Users can control whether this module is used by utilizing the drop-down list on the Project Inputs page in cell O15. If this is set to "Contributed for Equity", users should change the Land Seller Equity accordingly. If this is set to "Paid in Cash", users should change the Land Seller Equity to 0%. "Paid in Cash" with nullify this worksheet and the contributions & distributions will be split as normal between the limited partners and general partners.
• Int. Rate Export: This page is taken from Chatham Financials interest rate download. Users can use this page to get a reference for the base index on which their interest rate is/will be based.