A.CRE

REPE

See Real Estate Private Equity.

Frequently Asked Questions about Real Estate Private Equity (REPE)

Real Estate Private Equity (REPE) involves individuals or firms making direct real estate investments using private capital rather than public funding. These investments are often high risk, high return, with capital typically being the first in and last out.

REPE firms create value through active asset management, renovations, lease-up strategies, and strategic dispositions. For example, Jennifer Miller’s case involved analyzing a 100-unit multifamily deal with projected IRR of 17% and a 2.1x equity multiple.

REPE firms invest in a wide range of assets, including multifamily, office, industrial, and retail properties. The case example focused on a value-add multifamily deal in Hoboken, NJ.

Financing often involves leverage. In the Hoboken example, 70% of the $25 million purchase price was financed with debt at a 5.5% interest rate, and the remaining 30% came from equity.

Key metrics include Net Operating Income (NOI), Debt Service Coverage Ratio (DSCR), Internal Rate of Return (IRR), and Equity Multiple. Jennifer calculated a Year 3 DSCR of 2.27x.

Financial modeling is critical. Jennifer was evaluated based on her ability to build a cash flow model from scratch, projecting renovation costs, lease-up timelines, and returns.

The A.CRE Accelerator taught her how to systematically build real estate financial models, organize data cleanly, and apply real-world assumptions—skills that helped her complete the technical exam successfully.

Because REPE investments often involve early-stage capital in non-stabilized assets, investors bear significant downside risk but also benefit from value creation and upside upon exit.

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