How many of you want to make a career in real estate or Real Estate financial modeling Excel or REIT modeling?
Those who are interested to make a career in real estate financial analysis, read on…
I did a research on requirements of financial analysis in real estate or REIT sector.
Real estate financial modeling requirements
· Bachelor’s degree in Finance, Accounting, or Management (with a concentration in Finance or Real Estate), OR a MS/MBA in Finance or Real Estate from an accredited college or university
Real estate financial model building Excel skills
· Substantial knowledge of real estate accounting and financial statements and Commercial Real Estate Financial Model.
· Strong analytical, comprehension and problem solving skills, as well as strong verbal and written communication skills
· Ability to master new tasks and industries quickly
· Leadership experience and strong personal integrity
· Ability to prioritize tasks, work on multiple assignments and manage rapidly changing assignments in a team environment
· Commitment to obtaining outstanding results
· Outstanding quantitative analytical skills; strong knowledge of finance and accounting
· Strong financial modeling skills
· Excellent verbal and written communication skills
. Real Estate Investment Model Excel
. Excel Modeling Commercial Real Estate
· Ability to take initiative and function independently balanced with strong team skills
· Exceptional attention to detail
· Maintain high standards of professional and ethical conduct
· Proficient in MS Office applications
Real Estate Financial Modeling
Breaking into the real estate business can be a lucrative endeavor, but it can also prove to be a difficult process if you are unfamiliar with the field and with the way real estate investment trusts operate.
In order to maximize your chances of success, it is recommended that you familiarize yourself with a few fundamental aspects of the business before starting your career as a real estate developer.
Understanding what real estate financial modeling entails and how each of its encompassing segments function is the first essential step you have to take in order to build a rewarding career in real estate.
Once you’ve covered your basics and understood how this system operates, you can begin to work on your proficiency in some vital tools you will need to use.
Learning these useful tools and building a great skill set will not only help you become better at your job, but it will also make you a more desirable associate.
Finally, after increasing your understanding of the business and developing relevant skills to help you improve your professional activity, you can efficiently apply your knowledge in practical situations, gain important experience, and find ways to maximize your resources, time, and profits in order to achieve better results.
Understanding Real Estate Financial Modeling
Real estate financial modeling is based on accurately estimating the present value of a future source of cash revenue that a property will generate. Many factors can affect the projected cash flows a real estate asset can have. Understanding the basic real estate principles
Many factors can affect the projected cash flows a real estate asset can have. Understanding the basic real estate principles is,thus, vital to successfully drafting an accurate financial model.
Since properties are divided into categories and each category will have different business models and standard profit margins, the risk and return and the certainty of the projected cash flow will vary from case to case.
When you start modeling a property development you predict the incurring costs and expenses that are to be expected during the process and calculate the profit that you will eventually obtain.
Depending on each property and the amount of risk each investment implies, your predicted cash flow will vary from one stage of the development to the next, so time will become a major factor in calculating the possible profit the project can generate at different times.
As you start from scratch with an initial investment that will be comprised of debt and equity, the way in which you finance your project will also be different.
Considering all of these factors carefully and comprehending how they will affect your development project is vital to creating successful real estate financial models.
In a sense, you need to have a good understanding of not only real estate principles, but also of finance.
Using Microsoft Excel: Vital in Real Estate Financial Modeling
After you have familiarized yourself with the basic real estate and finance principles that affect real estate financial modeling you can start to work on mastering the essential skills that are required in this field.
Being proficient in Microsoft Excel is one of the most important assets you will have when modeling real estate: the program is universally used and mastering this valuation tool will be vital to your success.
It takes time, practice, and determination to master the Microsoft Excel software program but it is worth the effort as it will become a vital part of your real estate modeling.
Do not get discouraged by the time it takes to learn how to use Excel, it will become routine as you start working with it more and more and you will be able to accumulate new skills as time passes.
Making spreadsheets from scratch, creating sound real estate financial models, and organizing your projects with this program will be worth the effort it takes to learn how to use it.
Approaching Microsoft Excel for real estate modeling without having any prior knowledge of the software can be daunting and many real estate modelers find that they need some help when they first get started on working with it.
The good news is that because Microsoft Excel is the most commonly used valuation program in real estate modeling there are many good resources available for you to tap into when learning about the fundamentals and the basic functions it has.
The first thing you will need to do is to get a licensed Microsoft Office pack or a monthly Office 365 subscription in order to get the Microsoft Excel program.
Familiarize yourself with the interface, the display and the basic commands by performing basic tasks in it. You can also find information about shortcuts and formulae that can be used in Excel online.
After you have the program you can start looking into ways to learn how to use it: online courses, tutorials, videos, college courses, Q&A forums, self-education books, and training materials.
There are many comprehensive paid training packs and courses that you can get in order to learn Excel: some offer you a general guide on how to use the program while more specialized ones will focus on exemplifying how it is used for financial modeling.
However, you can also access some great training materials for free: you can watch this video tutorial on how to use Excel 2013, or use this extensive online source of Excel-related learning materials.
If you have been modeling real estate using Microsoft Excel you already know that there is always room for improvement.
Even if you have mastered the basics and are not willing to invest financially in expanding your knowledge of the program, you can still learn more by using free sources for intermediate and advanced Excel users.
Using the available Excel tools with ease will:
- save you time,
- help you to become more efficient, and
- contribute immensely to the quality of your overall work.
So, the more you learn about it the more you will be able to do as a real estate modeler.
Real Estate Financial Modeling Certification
Gaining new knowledge and experience in real estate financial modeling is valuable not only for building a great skill set, but also for improving your resume and your chances of getting the job that you want.
Consider gaining professional certification in order to add professional credentials to your resume: some employers demand such credentials while others do not, but an additional certification will surely improve your portfolio and your chances of being selected for the job.
For instance, you can get the CCIM (Certified Commercial Investment Member) certification provided by the CCIM Institute. You must take the core analytics courses that the Institute provides, submit a portfolio and pass an exam before you can obtain this certification, but it will be a definite advantage when applying for a job later on.
Paid courses for gaining additional skills such as Excel proficiency can also provide you with qualification certificates that you can add to your resume, so opt for the certifications that are relevant and useful to you.
Applying for a real estate license is often required and always encouraged as well so it is a step that most real estate financial modelers either have to take or choose to take at one point or another during their training or their careers.
Real Estate Financial Modeling Training
There are several training courses and university study programs that can help you learn the real estate and finance notions you will need in order to become a successful real estate financial modeler.
When considering applying for a job or starting to build a career in this field, it is important to take into account that many if not most employers require that job applicants have a bachelor’s degree in either real estate, accounting, or finance.
Each of these university programs can cover different topics and skills that will be useful in your career. For instance an accounting degree program will focus on financial accounting, taxation auditing, and managerial accounting while a finance degree program will touch on business finance, financial modeling, and investment. A real estate program will contain courses about real estate law, commercial and residential real estate finance and real estate evaluation.
Regardless of the program you choose when earning a bachelor’s degree, a great way to get the most out of your university studies is to look for and attend elective courses that cover useful computer programs and software such as Microsoft Excel so that you can familiarize yourself with the tools you will be using throughout your career early on.
Having an added qualification or an extra skill will set you apart from other job applicants and increase your chances of getting hired as employers tend to favor resumes that include a background in industry-related software.
Depending on the state that you live in you may be required to apply for a real estate license or a broker’s license: some form of licensure is mandatory in most cases, so it is very likely that you will have to get one.
Make sure you are up to date with the laws and prerequisites that exist in your state before applying for a real estate license. Laws, types of license, terms and conditions of eligibility vary from one state to another so make sure that you meet all of the requirements that apply in your case, as in some cases previous real estate experience or additional qualifications may be required.
Additional training and experience is always a bonus and many employers ask for relevant previous work experience in this field, so it is recommended that you go through a professional course, internship, or training program in order to improve your work portfolio.
As employers often look for analysts and real estate financial modelers that have previous work experience a time-saving option is to apply for an internship as early on in your career as possible, preferably while you are still studying to earn your bachelor’s degree. Another way to gain relevant experience is to participate in additional training programs and courses that can help you acquire new skills.
Professional training courses such as the Certified Commercial Investment Member certification course, the Real Estate Financial Modeling, or the Kahr Excel for Real Estate Analysis training course are all great options to improve your professional portfolio as well as your skills and knowledge. If you are interested in furthering your real estate career and want to study finance, real estate, business administration, or other similar fields in depth you should consider gaining an advanced degree such as a master’s degree as there are many viable graduate programs that you can benefit from completing.
Real Estate Financial Modeling Books and Manuals
Another great resource that you can use in order to improve your knowledge and real estate financial modeling skill set are specialty books.
These can help you acquire a better understanding of the domain and of the specific practices that are part of it.
In order to find out which specialty books cover the topics and aspects of real estate financial modeling that you are interested in you can go online and search for relevant information on financial modeling Q&A forums or look at the listed resources that specialty websites have available.
Depending on how much you already know about real estate financial modeling, Microsoft Excel and how it can be used for business analysis or finance projects, there are several books that you can read in order to expand your knowledge and become a better analyst.
I have listed the most commonly referenced, recommended, and used books that are available, each focusing on a different aspect of real estate financial modeling and the skills you will need to perfect in order to succeed in this business.
- If you think your basic real estate financial modeling notions could be improved or if you’re just starting a career in this field, general consensus on most real estate financial modeling Q&A forums is that Foundations of Real Estate Financial Modeling is almost a mandatory read.
- If you’re looking for a more detailed explanation regarding the use of Microsoft Excel in this field you can read Danielle Stein Fairhurst’s Using Excel for Business Analysis, + Website: A Guide to Financial Modelling Fundamentals as it elaborates on how to build business models using the software.
- John S. Tija’s Building Financial Models is another great option that focuses on practical advice and discusses the methodology you will need to learn so can help you if you’re still struggling with this aspect.
- A comprehensive manual on the equity research practices you will have to familiarize yourself with, Best Practices for Equity Research Analysts: Essentials for Buy-Side and Sell-Side Analysts was penned by James Valentine, a security analyst with a great professional record so it’s worth reading his conclusions on what the best practices are.
- Advanced Modelling in finance using Excel and VBA is a great introductory guide that explains step-by-step how Excel and VBA is used in finance modeling and how you can get started with the programs.
- Finally, if you’re interested in understanding the basic investment banking notions you will need to use in real estate financial modeling, Investment Banking: Valuation, Leveraged Buyouts, and Mergers and Acquisitions can give you all the basic technical terms and tools that you require and offer detailed explanations on how and why each of them works.
Real Estate Financial Modeling Templates
If you’re already working as a real estate financial modeler you know that using Microsoft Excel is vital to keeping tabs on your investment projects. However, as I’ve mentioned before, it takes some time and effort to learn how to efficiently use the Microsoft Excel software program for real estate modeling.
Templates can be life savers when you need to create capital budget analysis spreadsheets and risk analysis simulations but you haven’t quite mastered the valuation tool yet.
You can find many free Microsoft Excel real estate financial modeling templates and tools to help you create specific spreadsheets faster and easier.
However, although Excel spreadsheets and templates can be great tools the only way you are truly going to become a proficient Microsoft Excel user is if you take the time to learn how to create your spreadsheets from scratch.
So, while a template can be very useful tool when you are in a rush or still struggling to use Excel, the best way to learn he program software is to take the time to make them yourself when you have the time and can afford to do so.
You can find free spreadsheets online on dedicated real estate financial modeling websites and forums. Companies such as Real Estate Financial Modeling offer free templates on their webpage as well, regardless of whether you take their certification training course or not.
Picture sources: 1.
How will you prepare for real estate modeling
Real estate modeling is a complex area. However, if you start with basics, you’ll gain confidence.
Breaking Into Wall Street (BIWS) has created an online training program on real estate REIT financial modeling.