A complete real estate private equity underwriting model for a 240-unit Class B value-add multifamily acquisition. Built entirely from scratch in Excel as the capstone project for the Adventures in CRE Accelerator program.
This model was built as the capstone technical test for the Adventures in CRE (A.CRE) Accelerator — a rigorous, application-based real estate education program designed to develop institutional-grade underwriting and financial modeling skills. The test required building a complete, ground-up REPE underwriting model from a detailed set of deal parameters, with no template provided.
The model is a fully integrated, monthly cash flow model covering the entire investment life cycle of a 240-unit Class B value-add apartment acquisition: acquisition, renovation, stabilization, and exit over a 36-month hold period, with a two-tier GP/LP partnership waterfall.
The full working model is embedded below. Use the sheet tabs at the bottom to browse all worksheets, or download the Excel file to inspect formulas and assumptions directly.
| Source | Amount | % of Purchase | Notes |
|---|---|---|---|
| Senior Debt | $27,625,000 | 65% | 5.25% fixed, I/O, 30/360 |
| Equity | $11,412,625 | ~27% | GP 5% / LP 95% pari passu |
| Mezzanine Debt | $8,500,000 | 20% | 10.0% fixed, I/O, Act/365 |
| Total Capitalization | $47,537,625 | 112% | Includes renovation & financing costs |
| Metric | Unlevered | Levered |
|---|---|---|
| IRR | 15.3% | 35.3% |
| Equity Multiple | 1.52x | 2.37x |
| Partner | Equity Invested | IRR | Multiple | Distributions |
|---|---|---|---|---|
| Limited Partner (95%) | $10,841,994 | 29.9% | 2.10x | $22,768,637 |
| General Partner (5%) | $570,631 | 98.4% | 7.42x | $4,233,250 |
| Total | $11,412,625 | $27,001,887 |
The GP's outsized returns reflect the 25% promote earned after the 10% preferred return hurdle and full return of capital have been achieved for both partners.
| Metric | Value |
|---|---|
| Untrended Yield-on-Cost | 6.44% |
| Exit Cap Rate | 5.50% |
| Development Spread | ~94 bps |
| Gross Exit Valuation | ~$61.9M |
The model spans the full investment life cycle across a 36-month hold. It includes a dynamic renovation schedule tracking the blend of non-renovated and renovated units across 24 months (10 units per month with one-month downtime), a dual-tranche debt structure with distinct day-count conventions (30/360 for senior, Actual/365 for mezzanine), monthly revenue builds with compounding rent growth, a full operating expense schedule, and reversion analysis based on Year 4 forward NOI at a 5.50% exit cap.
The partnership waterfall distributes monthly cash flows through a two-tier structure: a 10% preferred return with full return of capital in Tier 1, followed by a 75/25 LP/GP split with 25% carried interest to the GP in Tier 2. In-place and stabilized (untrended) pro formas are built in parallel alongside the monthly DCF.
Rental revenue is modeled as a dynamic blend of non-renovated and renovated rents weighted by the share of units in each category in any given month, efficiently handling the revenue transition while capturing downtime. Rent growth uses monthly compounding at an effective monthly rate of (1 + 2.5%)^(1/12) – 1 to achieve a true 2.50% effective annual rate without overstating growth.
The senior loan uses 30/360 day-count (fixed monthly payment regardless of actual days), while the mezzanine loan uses Actual/365, requiring the model to calculate actual days in each month for precise debt service computation. The exit valuation is based on Year 4 NOI (Months 37–48), consistent with market convention for cap rate-based multifamily pricing, net of 2.0% selling costs.