Description

Real Estate Apartment Acquisition Financial Model

Real Estate Apartment Acquisition Model Financial Model Template offers the financial analysis of existing and new Real Estate Apartment Acquisition investments. The Real Estate Industry has seen a boom through the last decade. As a Real Estate Industry player. You may add a new line of business by acquiring a close competitor. Or else a newly built high rise and utilize this model for better business analysis and forecasting.

The Real Estate Apartment Acquisition Model Financial Model consists of three financial statements: the Monthly Income Statement, Yearly Income Statement, Balance Sheet, and Cashflow Statement. Along with the decision-making tools such as; Break-Even Analysis, Project Valuation, Diagnostic Tools, Startup Summary, and various Charts & Graphs. 

How to Use Real Estate Apartment Acquisition Financial Model 

The Input section briefly overviews the Real Estate Apartment Acquisition Model Financial Model. Here the project-related inputs are specified. 

 In the Input sheet, the financial assumptions and the inputs necessary to compute the model are stated—for example, investment funding sources, income sources, and expenses. Input cells are permanently colored Peach to help users identify quickly. Similarly, other cells, such as call-up (direct links from other cells), are filled in grey with black letters. In contrast, calculations are in white fill and black characters.

The assumptions are related to the operational expense sheet’s fixed and variable expenses projections. The data here is all defined and hard-coded, altering later on if desired.

In the Break-Even analysis, investors can identify the contribution margin. Which highlights the product through which the sales are coming. Based on the set of revenue assumptions, Profit & Loss Sheets are presented monthly and yearly for up to 5 years. Then, all the fixed and variable expenses are minus ascertain the Net earnings of that particular year or month.

The Cash Flow Statement tab shows the cash flows from various sources. Operating Cash Flow from this sheet goes to the Project Valuation sheet, which includes the company’s valuation. In the Project Valuation sheet, free cash flow to the firm equals discounting future Cash Flow at the discount rate.

The Dashboard tab shows the graphical representation of multiple ratios and analysis for quick overview and decision-making. 

Key Inputs of Real Estate Apartment Acquisition Model Financial Model

1. Investment Sources
2. Property Acquisition Cost
3. Rental Analysis
4. Debt-Investment Ratio
5. Rental Income 
6. Vacancy Ratio
7. Future Sale Price
8. Tax Rate
9. Renovation Cost Table
10. Operational Expense

 Key Features of Real Estate Apartment Acquisition Financial Model 

Input Sheet

The Input Sheet specifies all the inputs necessary to compute three financial statements. First, whenever an investor buys an existing building, it has to be renovated as per one’s need and business ideology; Real Estate Apartment Acquisition Model Financial Model does cater to this by adding a fully loaded renovation cost structure plan in a separate sheet under the operational cost head, which will be covering below. Second, the model asks for a loan-value ratio to calculate the true cost of financing the project. Then, it automatically calculates the financing amount to be arranged by the owner. Third, monthly borrowing cost is calculated spontaneously by entering financing terms and mortgage rates.

Similarly, the investment holding period is ascertained if the user enters its time to renovate, retain, and market to sell. This three-phase holding period is dynamic enough to cater to the delay in investor experiences while selling the property in the future.  Revenue generation for a  structure is primarily based on rental income, which also comes with vacant days in a year. Therefore it is safe to assume a cost charged against business revenues. Just like the model facilitates determining true property acquisition cost if an investor wants to sell the property, the model adjusts future sales price and all relevant costs needed to dispose of the asset.

Real Estate Apartment Acquisition Model Financial financial model template contains inputs that, when changed, impact the calculations and, therefore, it changes all relevant sheets. As a result, this financial model always has built-in flexibility to display different outcomes or final estimates based on this sheet’s changes.

Operating Expense

The operational expense sheet is 2nd one in the row which entails all expected recurring and non-recurring expenditures, which the owner must account for while starting the business. It starts with employees’ and consultants’ overhead costs.  Apart from a fixed salary, employees benefit worker compensation provision is there so that users don’t have to look around for additional payroll expenses, which arise occasionally. The model also incorporates expected cash outflows caused by hiring advisors/ consultants to revamp business strategy. 

Rental Analysis

The rental analysis sheet serves as a pre-requisite to the Revenue Analysis sheet. Here, all the property’s rooms/keys/units detail appears. Along with the unit type, it’s a brief description. Total units add to the input sheet. Per unit, the rent shown here multiplies with the number of units available/ occupied. Therefore, it will yield the total rent per category of units.

Similarly, all the unit’s rental income declined by the vacant rooms. This income connects to Revenues Statement. Rental Analysis also accommodates the number of rooms vacant per category. Thus all vacant rooms are taken into consideration for rental calculation. 

Startup Summary

A start-up summary tab includes the total cost incurred at the start of business and capital expenditure, how much cash has been injected by the company so far, and the number of months the template investment required.

A Startup Summary helps you take a realistic view of your idea and double-check whether the business has enough funds to support operations.

Monthly & Yearly Income Statement

The Real Estate Apartment Acquisition Model Financial Model provides the monthly and yearly income statement structure and a framework for creating a full corporate forecasting model tailored to your business.

A vital feature of the Real Estate Apartment Acquisition Model Financial Model is that it is “integrated,” which means that the Income Statement accurately captures the connection and interlinkages of the various line business items. An integrated financial model is powerful since it enables the Financial Model user to change any assumption in one part of the statement to see how it impacts investors’ template in other parts accurately and consistently.

The Real Estate Apartment Acquisition Model Financial Model Template’s monthly Income Statement sheet is ideal for those requiring regular reporting and details. To ensure accurate reporting, the Income Statement contains all revenue streamlines with gross and net earnings linked with a revenue analysis sheet. Oak Business Consultants understands every business’s goal. Therefore, we have developed a mechanism that helps business owners determine whether they are making profits.

Furthermore, the Yearly Income Statement gives you complete insights into revenue and general & administrative expenses. The Yearly Income Statement also contains several graphs, assumptions, ratios, margins, net profit, earnings, cost of services, and profit after tax.

Balance Sheet

This balance sheet enables you to analyze your position of current assets, fixed assets, liabilities, and equity. It also allows you to monitor your accounts receivable, accounts payable, accrued expenses, etc. Therefore, this specific financial model gives you the perfect space to analyze your critical financial balance accounts.

Cash Flow Statement

The Cash Flow Statement is the vital part of the three statements that report the cash spent and generated during a specific period. The Cash Flow Statements connect cash rotation between the income statement and the balance sheet.

Three main sections of the Cashflow Statement:

1. Operating Activities: We have included all cash in and out related to the operations of the business
2. Investing Activities: Any cash from the disposal of an asset and acquisition and investments appear in this section linked to the inputs and fixed asset tab.
3. Financing Activities: We have separately made a loan-related tab where you can enter all loan-related information. The tab connects to the Financing Activities of Cashflow Statement.

The Cashflow Statement in our Model contains a dedicated sheet to monitor and analyze your company cash-ins and out. This cash flow statement relies on several key inputs, such as Payable and Receivable Days, yearly income, working capital, long-term debt, net cash, etc. This calculation then computes your net cash flow and beginning and end cash balances. It’s a perfect template for your company’s cash flow management.

Break-Even Analysis

A break-even analysis can help you measure how different scenarios might play out financially. For example, if you increase the marketing budget or add another employee to the payroll, how many extra sales will recover that additional expense?

As a coup, we have included a Break-even analysis of our Financial Model, which will help the user determine sales. The break-even analysis will help you determine the profits generated at the various sales levels. The Break-Even Analysis refers to where your total sales contribution refers to fixed cost at zero profit and loss. This Technique consists of marginal costing, which behaves differently at various levels of output activity.

Project Evaluation

The project valuation sheet is critical because it gives an investor the directional strategy on whether or not the project should be invested. This sheet is fully linked to all financial statements projected earlier and asks for little input from the user. WACC, the weighted average cost of capital, is discretionary and needs to be put in by the investor, considering all equity and debt holders’ costs. Equity and debt values in that project investment amount took from loan-value ratios, which the user defines in the input sheet.

The terminal growth rate is the rate users foresee a business earning after a five-year forecast.  The sole purpose of the project valuation sheet is to use the DCF model to discount back all future expected cash flows of the firm at a discount rate or WACC (set by the user). Then determine the NPV/ free cash flows to the firm (equity and debt holders) to see if the project has positive or negative net cash flows. Next, the debt/ loan amount is minus to give equity holders free cash flows. Finally, IRR equals IRR function to see if the project’s IRR is greater than or less than the discount rate.    

Diagnostic Sheet

The diagnostic tool sheet again is a compact pitch book for fund generation marketing strategy, where probable investors can quickly analyze and access profit margins, cash flows, and break-even metrics to decide; if to invest in this business or not.  

Dashboard of Real Estate Apartment Acquisition Financial Model 

Users and readers respond and process visual graphs better than data. The dashboard provides you a graphical management tool that helps track all your relevant financial KPIs. It also Improves cash flow management sales and net revenue in detail to meet the financial objectives of your business.

Benefits of Real Estate Apartment Acquisition Financial Model 

Encapsulate Company Performance- The Real Estate Apartment Acquisition Model Financial Model analysis simplifies a company’s financial statements. It allows the user to express critical profitability and financial position information in just a few numbers. For example, the company’s net profit margin encapsulates the net effect of a company’s revenues and all expenses. Thus, it will enable the user to conclude a company’s profitability without going through lengthy accounts statements.

Bottom Line – A Real Estate Apartment Acquisition Model Financial Model can be the key to your company’s better and informed future. Succeeding in planning your Company’s finances well will mean overall success in making wise investment decisions, purchasing the right operating assets, controlling costs, and determining company valuation.

Accommodates Investors – This model provides valuation and performance analysis charts. It enables the investors and banks to determine the company’s worth considering lending funds to your company.

Based on Financial Principles – We did in-depth research on a Real Estate Apartment Acquisition Model Financial Model  Template. So this financial model is logically correct. And it is based on financial and economic principles and assumptions.

Properly Integrated – The model assumptions and calculations are correlated. So the change in the main sheet will automatically lead to the change in all related sheets easily.

Visualization Tool – This Financial model also prepares a clear communication of the quantitative outcomes, as obtained by calculations via various graphs and charts. Therefore, the user does not need to pay much attention to the financial model’s inner workings.

This Product Includes: 1 Excel File