Apartment Valuation Tutorial Using the Excel Real Estate Acquisition Model

[@VHSjk7xc]

Great job brother, Do you give any classed in the Los Angeles area?

[@airjordanatthis]

Spencer, for the IRR hurdle - When you say the LPs receive that preferred return, that is based solely on the IRR correct? Instead of using the cash on cash metric for the pref, when you using a waterfall structure you are choosing to use IRR as the metric? Is that correct? Thanks.

[@niqvuk]

how do you enter rent roll for apartments that are vacant to make sure it accounts for current income and future values accurately?

[@benmcnaughton5544]

I dont see a property sale in the cash flows tab on the exit year. Where is the sale of the property being calculated into the returns?

[@yvesl4407]

Thanks for the video Spencer. Excel question for you - how did you get your spreadsheet to automatically format the next line as you fill in your rent roll?

[@adventuresincre]

Yves Lau - the subsequent rent roll lines appear using conditional formatting logic. Mouse into any of the cells inside the rent roll and click Conditional Formatting on the Home ribbon. You can see the formulas I used to create that feature. Thanks for watching!

[@cv5330]

Why not use NOI for the purchase price? Wouldn't you get similar price point?

[@richieg.3192]

Hey spencer, just got the model and there is no DCF Value option in the Purchase Price Method. Did you remove?

[@adventuresincre]

Hi Richie - the model has been updated quite a few times since this video, so the functionality for finding the "DCF Value" is a bit different. But it is still there. In cell D19 of the Property Summary tab you'll find the Present Value (i.e. DCF Value). I de-coupled the actual purchase price (cell D14) from the valuation (cells D19:D20) based on feedback from various users. Hope that helps! - Spencer

[@richieg.3192]

@@adventuresincre ok nice! So just use the present value toggle then? Ok thanks!

[@dreamer541]

Hi Spencer, I am curious has anyone here ever asked you to do an analysis on a possible Apartment or multi unit acquisition?

[@airjordanatthis]

What a dumb question

[@kimtsim1210]

Hi, thanks for uploading this tutorial. I am just wondering do you have a copy of the attachment flyer you downloaded from Loopnet uploaded on your blog? It isn't available on the website anymore. Would be great for completeness :) Thanks!

[@adventuresincre]

+kyt - Thanks for your comment. Unfortunately, I didn't keep a copy of the flyer - sorry about that. If I can answer any questions about the model, please let me know. (Edit: Found a copy online. Not sure how long it will be live but here is the link: leec-az.reapplications.com/filecabinet/Property/020573/Serrano%20Village%20Flyer.pdf)

[@kimtsim1210]

+Spencer Burton Oh thats great thank you! I can use this with the video now.

[@Dalmutiii]

What does "," mean in an excel formula? Thanks in advance!

[@felixthecash]

hey how do you compute if the LP is a bank at 90%?

[@flaskwater44]

What's the difference between "Replacement Costs" and CapX?

[@adventuresincre]

Jose Guevarra - Hi Jose, CapEx (Capital Expenditures) are expenses that you incur for items that you expect to have a useful life greater than one year. Rather than treating these as expenses written off in the year they're incurred, Capital Expenditures are typically are depreciated over a certain number of years. Replacement cost, on the other hand, is what you would expect it would cost to recreate/rebuild an existing property.

[@ducatirider7]

Replacement is a one time cost. Capex is a continual payment. An example would be a roof replacement cost $24,000, the CapX every month is 200 if you plan on holding this property for ten years.

[@pv0315]

God bless you