Leveraged Breakdowns

This post examines the single most important real estate private equity skill. Mastering this skill will help you become your fund’s favorite real analyst. What is the skill? Simply put, you must learn how to convey information faster and more accurately than anybody else . You do that by building clean and flexible real estate LBO models . This post lays out the case for style and readability at every step of the modeling process. Information is The Lifeblood of Real Estate Investing Real Estate LBO models are the nexus of information. Every important piece of data is consolidated inside the model. When lawyers negotiate ground rent, the end goal is to load it into the model to see how their terms impact returns. When negotiating an affordability program with the local government, the financial model is used to understand which program is most accretive to the investment. Anything and everything that your fund considers about an investment winds up in the model. And yet, too ...

This post includes technical questions that I ask when interviewing candidates at my real estate private equity megafund. These questions are softballs meant to test your basic grasp of easy concepts. If you struggle with these real estate PE interview questions to any degree, then you’re not yet up to par. If you need to brush up, I highly recommend you check out Leveraged Breakdowns , the premier resource for real estate private equity education. Practice Until These Technical Questions Feel Like Baby Math Your interviewer considers the following technical real estate private equity interview questions to be easy, baseline checks of your skill. Practice until you’re comfortable in a high-stress interview. Also, make sure your mental math skills are tight. If not, there’s plenty of basic apps and websites out there that will help you practice. What is NOI? Question: What is NOI? What are the most common items included in NOI? Answer: Net operating income (“NOI”) is the st...