I've worked on a lot of models and templates that contained cash flow waterfalls with multiple IRR hurdles, single IRR hurdles, multiple preferred return hurdles with simple interest, single hurdle preferred returns and everything you can think of in-between. There are some commonalities between good waterfalls as far as how you should lay out the formatting so that it is easy for investors to understand as well as anyone that needs to view them.
What Makes a Good Multi-Family Underwriting Template
When we are talking about underwriting in this context, it means evaluating and assessing the risk of investing in a a multi-family real estate deal. The main thing investors looks for when using these kinds of templates is if the deal can produce sufficient returns given the required investment and assumptions about future operating cash flow as well as at what occupancy levels and/or debt service levels does the deal not make sense anymore. Not making sense means negative operating cash flows and/or negative cash flows after debt service.
10 Equipment Rental Business Model Strategies
The equipment rental space is vast and all sorts of business models have been built around the idea of making money be renting out equipment. The main thing owners and operators (and investors in these businesses) want to know is if the investment is worth the risk (WACC). They are cash flow businesses (buy equipment, rent it out for cash flow over time) and possibly sell the equipment at some future date.
Financial Model Template Beginner's Guide
I've been building financial models for clients regularly since 2016. This includes small businesses and businesses with 100s of millions in revenue. What makes a good template depends on several factors and nearly every case is a little bit different. I'll go over all the factors I consider when building something new.
Real Estate Trends Over the Next 20 Years
It is currently mid 2023 and I am looking at some of the potential big trends to come in the real estate industry. Real estate is where you get rich slowly and often it takes patience with long-term goals / mindset. To drive those goals, it is important to have some macro-level ideas about what is going on in the space and where things could be headed.
SaaS Spreadsheet for Management vs SaaS Financial Projection Model
I've worked with all sorts of owners, operators and executives in the SaaS space. One thing that is interesting is what management uses to help make decisions in terms of spreadsheets vs. what is used to raise money from investors in the form of a three or five year SaaS financial model. They are both used to some degree, but day-to-day management requires simplicity and functionality that is not so rigid or formal.
Economic Limitations of Blockchain and Cryptographic Token Ecosystems
Are there any current logical flaws in the macro economics of the current state of cryptographic tokens, blockchain, and cryptocurrency in general? Well, there may be so let's dive in.
Limitations of WACC Methodology
The WACC (weighted average cost of capital) is a methodology commonly used to come up with a discount rate for the future cash flows of some project or business. The rate is telling the analyst what it cost to finance a companies operations based on the cost of equity (measured as a rate) and the cost of debt (measured as a rate). The cost of debt part is pretty straight forward but the cost of equity is where things can get messy.
Sustainable Investing by Large Companies
Larger companies are increasingly recognizing the importance of sustainable project investing as part of their corporate strategies. They are integrating environmental, social, and governance (ESG) factors into their decision-making processes to mitigate risks, enhance their reputation, and create long-term value. STWD (Starwood Property Trust REIT) recently announced they were jumping into this (June 2023) by raising north of $350M to finance various projects that were considered 'sustainable'.
What Open Source Means and How it Can be Monetized
Open source refers to a type of software or product that is released under a license that grants users the freedom to use, modify, and distribute the source code. It promotes collaboration and transparency, allowing anyone to view, modify, and contribute to the codebase. You will often see for-profit companies that are partially open source, meaning they will release certain projects that are licensed with usage restrictions and are proprietary in nature (such as OpenAi's GPT-3 and GPT-4 language models.
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