Introducing Waterfall Models Step by Step

Learn how to build real estate equity waterfall models in Excel step-by-step with easy-to-follow videos and done-for-you templates


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Equity waterfall modeling in Excel is one of the most sought after skills in real estate finance. It’s also one of the hardest concepts to learn. Since cash flow can be split in a countless number of ways, waterfall models can and do vary widely. This can make seeing the big picture and understanding how everything fits together a difficult task.

That’s why we created this course. To help you learn real estate equity waterfall modeling in Excel step-by-step, with easy-to-follow videos, and done-for-you templates.

What would mastering waterfall modeling basics do for you?

  • Feel more at ease when working with clients, partners, and co-workers.
  • Gain confidence when building and working with waterfall models in Excel.
  • Understand the right questions to ask and what really matters.
  • Stand out from the crowd and land your dream job.
  • Break into the CRE industry with a smooth transition

What is Waterfall Models Step by Step?

Waterfall Models Step by Step is an online video-based course that teaches the basics of real estate equity waterfall modeling in Excel, to beginners who want a head start, and industry professionals who want to plug the gaps in their education.

Whether you’re brand new to commercial real estate or a seasoned pro that wants to brush up on your skills, this course will give you a solid foundation to build and understand a variety of real estate equity waterfall models.

The training is released in 10 separate modules and consists of easy-to-follow videos, done-for-you templates, worksheets, and step-by-step case studies. All of the training is online, contained in the private member only site.

During the course we’ll walk through the basics of waterfall model structures, cover Excel formulas commonly used in waterfall models, and then we'll build three different waterfall models from scratch: a 3-Tier IRR waterfall model, a waterfall model with a catchup provision, and an equity multiple based waterfall model. By the end of this course you’ll know how to build these waterfall models from scratch in Excel. You'll also have the basic building blocks to build a variety of waterfall models in your day to day work. Plus, you’re a student for life. That means you can review and retake the program for free for as long as the program exists.

Who Should Take This Course?

  • Existing commercial real estate professionals who want to brush up on their skills and plug the gaps in their education.
  • Career changers who want to break into the industry.
  • Analysts who want to get ahead but struggle with waterfall modeling.
  • Students who want to ace their interviews and land their dream job.
  • Recent grads and young professionals who want to get ahead and stand out from the crowd.

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Your Waterfall Models Step by Step Course Includes:



Module 1: Introduction to Waterfall Models
  • How to get the most out of this course
  • What you will learn in this course
  • Overview of the course layout and modules
Module 2: Foundational Waterfall Model Concepts
  • What you should know about the Capital Stack
  • How the “Waterfall” concept works and why it matters
  • What are the key components of an investment waterfall model?
  • How the Owner’s Agreement works and why it's important
Module 3: Introductory Waterfall Model Example
  • Simple waterfall model example step by step
  • What each line item in the example waterfall model means
  • Key waterfall model concepts you should understand
Module 4: Key Excel Concepts
  • Key Microsoft Excel concepts needed to create an equity waterfall model
  • How to use Microsoft Excel keyboard shortcuts to make creating an equity waterfall model easier
  • Understanding Excel industry standards and best practices
Module 5: Waterfall Model Setup
  • Walk through of example scenario
  • How to setup the waterfall model cash flows
  • How the Equity Contribution & Equity Distribution schedules work
Module 6: Waterfall Model Inputs
  • Overview of inputs required to create an IRR based waterfall model
  • How to build the required inputs for the IRR based equity waterfall model
  • Discussion of various Excel formulas and when to use them
Module 7: Three-Tiered IRR Based Waterfall Model
  • How to setup each step for the IRR based equity waterfall model
  • How to create a cash flow summary for the IRR equity waterfall
  • How to create the IRR based equity waterfall model cash flow checks
  • What you should know about best practices
Module 8: Waterfall Model with Catchup Provision
  • How the “Catchup” provision works
  • How to setup the IRR based equity waterfall model with a catchup provision
  • How to create a cash flow summary for the IRR based equity waterfall model with a catchup provision
  • How to model cash flows for the IRR based equity waterfall model with catchup provision cash flow checks
Module 9: Equity Multiple Based Waterfall Model
  • How the equity multiple works
  • How to configure the equity multiple waterfall model
  • How to model cash flows in the equity multiple waterfall model
  • How to create a cash flow summary for the equity multiple waterfall model
Module 10: Conclusion
  • Review of equity waterfall modeling key concepts
  • Summary of course learning objectives
  • Concluding thoughts and next steps

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I nailed a financial modeling test and got a job offer at a great real estate private equity shop thanks to you guys. Omar Morales | Investment Analyst
I want you to know how much I appreciate PropertyMetrics. As a 30 year real estate attorney focusing primarily on commercial leasing and purchase and sale of commercial properties, it is extremely helpful to see the principles I have learned and used for so many years explained so clearly. Jon K. Ladd | Business and Real Estate Law Group

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