Recommended financial models for apartments?

Question

Hi everyone,

I am fully aware of the BP calculators (which are awesome), but as I am a finance person and like to see things being calculated in excel (or a platform with greater granularity), do you have any financial model examples for valuing apartment complexes and modeling out their cash flow? I'm aware of ARGUS as well those I've seen from Googling, but I definitely trust the opinions of BP members and just wanted to see if there was anything you guys could recommend from your experience.

Ideally hoping to start within the 20 unit range, but open to all shapes and sizes to become more familiar.

Thank you!

Michelle

Seth C. · Answer

For refm, it is a mix of having many features like realdata, including double promote, two levels of detail that you can use to promote to different people, rehab scenarios, etc., as well as being customizable. That last point is a big one. I find it hard to justify $500 for realdata when it is not customizable, but it is Galinelli's product, and it is very well done. REFM is also associated with some big names, Bruce Kirsh there works on some level with Peter Linneman from Wharton. So those two are backed by some of the biggest names in RE finance.

At the same time, I don't really know if their computer programs offer anything more than what is offered by Michael, or that couldn't be easily integrated into his excel models. Two things that stood out to me are the double promote and the MIRR. But MIRR can be added in about 30 seconds since there is an excel function for that (as I found out), and it is not even useful for promoting your deals. Everyone has their own baseline for returns, and they need to do it themselves. Double promote, lease option returns versus syndication, more complex tax calculations, comparing different opportunities in detail ... at least the possibility to add it is there.

In reciprocity, what are the main points you are looking for? I am quite curious as to what you are leaning towards, whether it is ground-up dev or anything you have seen... I am shying away from ground up for now, because I think I risk focusing on things that are textbook important but perhaps need to take a back seat in light of an experienced investment perspective. These guys have already done that for me, so it is an inexpensive way to get some training wheels while I learn by doing.

Seth C. · Answer

I am currently looking into refm, getrefm.com (excel or web). I think the two most advanced options would be that and realdata.com. Michael Blank, who writes on the BP blog, also sells something at themichaelblank.com (excel). I have not looked in depth into it, but it looks pretty solid for most use cases while being considerably less expensive.

Tony Blaine · Answer

Hi Michelle, I use the Opportunity Evaluator by J. Scott Scheel. It uses Excel format and does all the calculating for you from current to projected financials for presenting them to your network of investors,etc.

I've used this for the last few years and haven't needed anything else. I'm open to also knowing what other people use.

Bryan H. · Answer

I think you will like this. CCIM DCF

Nick B. · Answer

@Michelle Watt, I recently started a different thread about property analysis and shared my spreadsheet there. You're welcome to take a look:

http://www.biggerpockets.com/forums/88/topics/197189-a-sample-value-add-apartment-deal---how-un-realistic-is-this-porforma

Michelle Watt · Answer

@Aaron Montague - Hi Aaron, that's comforting to know people still use excel haha. Helpful and interesting to know you don't factor in appreciation anywhere, that's probably something I'll follow since I know appreciation should only be icing on the cake, if you can get it. Thanks for your advice!

Aaron Montague · Answer

@Michelle Watt

I have a simple Excel sheet that I use for multis.  At the end of the day I come up with a number that I'd like to pay for the place.  I have posts all over BP with "I'd pay $xxxx for that place if..." or something like that.

I like it simple.  I don't use appreciation in my calculations anywhere.  When I look to sell a place, I'm going to know that I didn't spend extra money holding it in hopes that it's value has gone up.

If I play the appreciation game, I prefer forced.

Michelle Watt · Answer

@George Hermann - thank you so much, I really appreciate it!

Michelle Watt · Answer

@Bryan H. - thank you! I've been on CCIM but didn't realize there were models. Will take a look, thanks so much!

Recommended financial models for apartments?

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