Interview Case Study for Real Estate Private Equity Start-up

Based on the WSO content on real estate private equity case studies, here’s what you need to focus on to excel in your upcoming interview:

1. Understanding the Fund’s Properties: Start by thoroughly understanding the specifics of the five properties in the hypothetical fund. Consider factors like location, type of property (commercial, residential, etc.), current occupancy rates, and market trends. This foundational knowledge will be crucial for your analysis.

2. Financial Modeling Skills: Since you mentioned that no Argus is required and only Excel will be used, ensure your Excel skills are sharp. Focus on creating a detailed pro forma model. Key components should include:

   • Property-level cash flow statement: Project the cash flows for each property, considering potential revenue streams and expenses.
   • Debt amortization table: If there's existing debt or if new debt will be considered, model the amortization schedule.
   • Sources and uses table: Clearly outline where the capital is coming from and how it will be allocated.
   • Equity waterfall: Model out the distribution of returns to investors based on agreed-upon hurdles.
   • Return metrics: Calculate the internal rate of return (IRR), cash-on-cash return, and equity multiple.

3. Scenario Analysis: Include scenario analysis to show how the returns would change under different economic or market conditions. This will demonstrate your ability to think critically and adapt to changes.

4. Recommendations: Based on your model, provide clear and data-backed recommendations on whether to hold or sell each asset. Consider both the quantitative outcomes of your model and qualitative factors such as market growth potential or risks.

5. Memo Writing: For the 2-page memo, be concise and make sure to:

   • Summarize Key Findings: Start with a brief overview of your analysis and key conclusions.
   • Detail the Analysis: Explain the rationale behind your recommendations with references to your model.
   • Highlight Assumptions: Clearly state the assumptions made during your modeling process.

6. Preparation Resources: Review similar case studies on WSO, especially those related to real estate modeling. Utilize the financial modeling templates available as part of the WSO bonus content to practice and refine your approach.

By focusing on these areas and preparing thoroughly, you'll be well-equipped to tackle the case study and make a strong impression. Good luck!

Sources: Real Estate Modelling Test Practice, How to break into Real Estate Private Equity (w/ 0 RE Knowledge), Real Estate Private Equity Case, Real Estate Modelling Test Practice, How much Finance should you be comfortable with in the real estate world?