Description

Real Estate Development cash flows require greater skill and flexibility from Analysts, and an ability to work with simultaneously with project partners. Value add and opportunistic property investments are complex both in their initial scope and their cash flow projections.

This course will show delegates how to appraise projects in Excel, incorporate and communicate updates as they happen and ultimately understand how to convert an opportunistic property investment into a core asset that can be sold on.

Residual models (profit & site) are demonstrated first to illustrate the main components of any scheme and the traditional methods of evaluation such as profit on cost ratio, rental yield and interest cover. Development cash flows are then constructed in detail looking in particular at phased income as well as fixed, variable and incidental construction costs and their impact on the net cash flow. Additional performance metrics are calculated including geared IRR and return on equity.

Development financing can be trickier than straightforward senior debt investment financing. This is because finance is often required in stages. The brought forward carried forward method demonstrated on the course, is the easiest way to deal with programmed debt drawdown functions and rolled-up interest.

The assessment of project specific risk is arguably much more important in development schemes. Sensitivity analysis and scenario analysis are covered in the final section of the course.

On this course you will…

Learn how to calculate land and profit residuals

Learn how to structure a full development cash flow, including phased sales, S-curve and straight line cost functions

You will be taught how to find maximum bidding prices for site development and building refurbishments

Understanding development financing considerations and learn how to optimise financing

Analyse financial and project completion risks

Employ best practice and find solutions to common modelling problems

Who will benefit from this course?

Developers

Surveyors

Real Estate professionals at any level with exposure to real estate financial models on a frequent basis

Fund managers

Asset managers

Land managers

Planning managers

Lenders

Course Outline

Day One

Learn how to build a discounted cash flow, analyse returns and understand the components of development models

Gross versus Net Yields, calculating Net Development Value (NDV)

Profit residual, with and without financing

Site residual, how to calculate profit without knowing your costs.

Introducing financing to site residual calculations

Purchase price and acquisition costs

Phased Sales, marketing and disposal costs

Modelling construction costs using straight line basis, fixed costs, variable costs, incidental costs and construction fees

Professional fees

Income and expenditure project functions

Logic functions, logic tables and array formulae

Day Two

Learn how to build a detailed property development project cash flow, add financing and perform risk analysis on commercial development projects

Multiple IRRs, competing projects, scoping and linear programming, maximising performance

Return metrics: Equity profit ratio (EPR), Costs paid out of proceeds (POP), Profit on cost ratio (PCR)

Alternative site calculation, Net present value (NPV),

Modelling construction costs using S-curve , variable costs, incidental costs and construction fees

Switching between scenarios

Introduction to Development financing, Pari Passu versus Equity First Financing

Debt scheduling: brought forward and carried forward method

Consideration of the impact of development finance interest, fees and covenants

Included in the Course

CPD Accredited Certificate & LinkedIn Proficiency Badge

Course Manual - In-Person Course attendees will receive a Physical Copy, Virtual Course attendees will receive a Virtual Copy and have the option to purchase a Hard Copy at an additional fee

Course Files

Online Learning Platform access - Further Learning Resources (Reading, Files and Videos)

Post Course Support - Two Months of Questions & Answers, and One year of support is available for an additional fee

For more information about the Real Estate Developer such as course delivery methods, pricing and dates, please contact Sam on the Bayfield Training Sales team:

E - s.musgrave@bayfieldtraining.com

T - 01223 517851

W - www.bayfieldtraining.com

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Real Estate Developer (Development Cash Flow Modelling in Excel)

By Bayfield Training

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