Entries by Michael Belasco

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A.CRE 101: How To Use The Discounted Cash Flow (DCF) Method To Value Income Producing Property

The Discounted Cash Flow Method is a method to value a project by taking all future projected cash flows of the project and discounting them back to time zero (date of purchase) using a predetermined discount rate (the discount rate when used in a DCF to look at an investment can be looked at as […]

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3 Tiered Waterfall Module Added to the Condo Development Model

After receiving a few requests, I’ve finally gotten around to adding an equity waterfall module to the Condominium Development Model. This module allows you to model partnership splits up to three tiers using either equity multiple hurdles or IRR hurdles. Additionally, you can model for a preferred return for the limited partner where either (1) […]

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Construction Draw Schedule: Accounting For True LTC

Mitigating A Common and Potentially Costly Error During Development Underwriting When lenders provide debt for a development project, they lend based on a Loan-to-Cost ratio (LTC), which is simply the percent of the total budget the lender will agree to lend to the borrower. So, if a project costs $10MM, and a lender loans $6MM, […]