Tutorials for A.CRE Value-Add Apartment Acquisition Model
As promised, I’m following up the release of the A.CRE Value-Add Apartment Acquisition model with a series of walk-throughs and tutorials to help you better understand the various elements of the model. The tutorials start with the basics – a guide to getting started, and then get progressively more advanced.
If you’ve already visited the model’s download page, some of the material below is redundant – but I’ve included everything in this post so you have one place to come to learn to use the model.
If you haven’t already, download the model here.
Overview – A.CRE Value-Add Apartment Acquisition Model
The A.CRE Value-Add Apartment Model includes one primary inputs tab, one report tab, and a tab to track version changes to the model.
Version Tab (Visible by default)
The model opens initially to this tab so you can see what changes have been made in the most recent version of the model. On this tab you can also find links to model tutorials, guides, support, and other information.
Underwriting Tab (Visible by default)
The Underwriting tab is where all of your primary inputs are entered. The tab is broken up into six sections, built from top to bottom. The sections can be accessed either by scrolling down to each or using the buttons along the top of the screen. The six sections are ‘Investment Description’, ‘Investment Cash Flows’, ‘Operating Cash Flows’, ‘Reversion Cash Flows’, ‘Property-Level Returns’, and ‘Partnership-Level Returns (Waterfall)’.
Summary Tab (Visible by default)
While property-level return metrics levered IRR and levered EMx are shown along the top of the Underwriting tab, the bulk of the risk and return metrics are shown/visualized on the Summary tab. The summary tab also includes two operating cash flows charts, a strengths/weaknesses section, a frame to include a picture/map, and a summary of the investment. The Summary tab is meant to be printed, and as such the view mode is set to Print Preview by default.
Annual Cash Flow Tab (Hidden by default)
In beta v0.3, we added an Annual Cash Flow report tab. The tab rolls up the monthly cash flows to annual periods, so you can view high-level cash flows on one page. The report is printable. You can access the report by pressing the ‘Show’ toggle on the Summary tab with the Property Cash Flow section.
Tutorial #1 – Guide to Getting Started Video Walk-through
To help you get started using the model, I’ve recorded a video overview of the model to get you started.
Tutorial #2 – Using the Model to Assess a Value-Add Acquisition
- Click here to download the underwriting notes for the hypothetical property used in this tutorial
Tutorial #3 – Using the Model to Assess a Stabilized Acquisition
- Click here to download the underwriting notes for the hypothetical property used in this tutorial
Tutorial #4 – Getting the Most out of the Investment Cash Flow Module
Tutorial #5 – Modeling Capital Sources
Tutorial #6 – Using the GP Fees Module
Tutorial #7 – Adding/Deleting Unit Types
Tutorial #8 – Using the Variable Interest Rate Module
Tutorial #9 – Modeling Lender Reserves
Tutorial #10 – Modeling Partnership-Level Returns (Equity Waterfall)
Frequently Asked Questions about A.CRE Value-Add Apartment Acquisition Model
What are the main components of the A.CRE Value-Add Apartment Acquisition Model?
The model includes three key tabs: the Version Tab (change log and links), the Underwriting Tab (where all primary inputs are entered and calculations occur), and the Summary Tab (provides visuals, summaries, and metrics for review/printing). An optional Annual Cash Flow Tab is hidden by default but can be toggled on.
Where do I input my deal assumptions?
All input assumptions should be entered in the Underwriting Tab. This tab is organized into six sections: Investment Description, Investment Cash Flows, Operating Cash Flows, Reversion Cash Flows, Property-Level Returns, and Partnership-Level Returns (Waterfall).
Is there a video to help me get started?
Yes. Tutorial #1 is a video walk-through that provides an overview of the model and explains how to begin using it effectively.
How do I use the model to underwrite a value-add vs. a stabilized acquisition?
Tutorials #2 and #3 cover this. Each tutorial includes downloadable underwriting notes and demonstrates how to input assumptions specific to value-add or stabilized deals, including revenue, expense, and capex assumptions.
How can I modify the unit mix (add/delete unit types)?
Tutorial #7 explains how to add or delete unit types within the model. This allows you to customize the rent roll to match the specific layout and configuration of your subject property.
Does the model support variable interest rates or lender reserves?
Yes. Tutorial #8 shows how to use the Variable Interest Rate Module, and Tutorial #9 demonstrates how to model Lender Reserves as part of your financing structure.
Can I model general partner fees and promote structures?
Yes. Tutorial #6 covers the GP Fees Module, and Tutorial #10 provides a guide to modeling Partnership-Level Returns (Waterfall), including promote tiers and equity splits.
Is there a summary of financial metrics and charts?
Yes. The Summary Tab contains key return metrics, two operating cash flow charts, a project strengths/weaknesses section, and a summary of the investment — all formatted for print.
