Essential Real Estate Modeling in Excel

Modeling real estate requires learning certain concepts that will help you handle the long-term nature of the real estate. This is what we will discuss in this section

There are 4 main things you can do around the real estate.

• But to Sell

• Rent

• Build

• Servicing Real Estates

We will discuss it in more detail is this lecture

In this lecture, we will discuss the time value of money in other words what is the difference in value between 100 USD received today and 100 USD received tomorrow

In this lecture, I will show you how to calculate the time value of money in Excel

In this lecture, we will discuss what NPV - Net Present Value is and how to use it in practice

• NPV stands for Net Present Value

• NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time usually related to some investment

• It’s used to determine whether something (action, investment, etc.) makes sense or not

NPV enables you to make decisions about a specific investment. We will discuss how to use that as well. Later on, we will use this concept extensively to make decisions about investments

In this lecture, we will discuss what NPV - Net Present Value is and how to use it in practice

• NPV stands for Net Present Value

• NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time usually related to some investment

• It’s used to determine whether something (action, investment, etc.) makes sense or not

NPV enables you to make decisions about a specific investment. We will discuss how to use that as well. Later on, we will use this concept extensively to make decisions about investments

Linked to NPV is the so-called IRR. We will discuss it in this lecture:

• IRR stands for Internal Rate of Return

• IRR is a discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero

• IRR tells us how much you would have to earn on a saving account every year to get to the same results as from the investment you are analyzing

In this lecture, I will show you how to use in practice in Excel the NPV

Here we will discuss a very useful concept that is used in business and should be also used when making serious long-term decisions the so-called the total cost of ownership

Let’s imagine that Peter is considering 2 choices: buying an apartment or renting it. Let’s use the total cost of ownership to see what makes sense.

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

When it comes to real estate, we have 3 main groups. The majority invest in residential real estates

• Residential

• Commercial

• Land

We will generally discuss how you can earn on residential real estates

Of course, real estate has its risk factors as well. We will discuss them in this lecture

Let’s have a look at the main elements of the Loan

• Principal

• Interest rate

• Loan Duration

• Interest Paid

• Payments

First, let’s divide the loan in terms of how they are being paid

• Fully Amortized Loan / Annuity

• Interest-Only Loan

• Other

Let’s have a look at how the payment of the Fully Amortized Loan would look like.

We will look at different types of loans and how to calculate them in Excel

In this section, I will show you how to model in Excel buying and renting apartments. We will first look at renting 1 apartment and then what would happen if we do it at a much bigger scale

Let’s imagine that John is considering investing in an apartment that he wants to rent. He will be using a mortgage/loan to finance the purchase.

Let’s have a look at the apartment that he considers buying to rent

• He considers buying 1 small apartment in Warsaw

• He will put USD 20 K of his own money

• For the rest, he will take a mortgage for 20 years with an interest rate of 4.0%

• Help John estimate how much he can earn from this investment

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study

After the first investment, John is considering going big scale and buying an apartment every year. Help him analyze the value of his assets.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study.

Now we will move to modeling the business model of a hotel or similar models where you rent on daily basis (Airbnb, Booking.com, etc.). They differ from the traditional Buy & Rent Models.

Let’s first look at the Margin after Variable Costs, and after that at the drivers of the EBITDA.

Paul has some capital from selling his SaaS startup. Now he wants to invest some of his money into a chain of hotels. Help him estimate how much money he has to invest.

In this lecture, I will show you the solution to the previously introduced case study.

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

Paul has some capital from selling his SaaS startup. Instead of hotels he considers also renting apartments and offering them on Airbnb or Booking

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In the 6th section, we will discuss the modeling of so-called flips. Again we will discuss the business model and after that, we will model it in Excel.

We will be using 3 different terms for flips

• Flip / Flipping

• Flip duration

• Slot

We will explain them in this lecture

We will have at the main drivers for flips

Javier wants to do flips on a bigger scale. He wants to take 1 new loan (slot) every year. Help him estimate how much money he can make from this business.

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study

In this lecture, I will show you the solution to the previously introduced case study