The Advanced Real Estate Equity Waterfall Modeling Class

Learn to model advanced real estate equity waterfall structures like catch-ups, clawbacks, multiple return hurdles, and more in a step-by-step, easy to understand way.

Real estate equity waterfall modeling is one of the most complex and advanced topics in real estate finance and financial modeling.

And with so many different structures out there, it can get overwhelming reallyquickly.

But fortunately, it doesn’t have to be.

If you’re looking to learn how to model complex equity waterfall structures like GP catch-ups, clawbacks, multiple return hurdles, and cash-on-cash return hurdles in an easy-to-understand, step-by-step way, you’re in the right place.

My name is Justin Kivel, and I’ve taught over 15,000 students real estate financial modeling and analysis through my Break Into CRE courses.

And personally, throughout my career I’ve modeled over $1.5 billion of closed commercial real estate acquisitions, each of which involved raising capital from equity investors, and incorporating a unique waterfall structure to match each specific deal.

In this course, we’re going to go step-by-step through building four real estate equity waterfall models from scratch:

The GP Catch-Up Model: In this model, we’ll cover how to build out a GP “Catch-Up” waterfall structure in Excel, where cash flows are split pari passu until a certain hurdle rate, then cash flows are split in a different ratio until the GP “catches up” to a certain percentage of the overall profits, and then an additional structure above that. And we’ll build it in a way where you can just change a few manual inputs, and everything else will change automatically for you.

The Clawback Model:In this model, we’ll build out a “Clawback” waterfall structure in Excel, where the GP or sponsor was paid promoted interest early in the fund life based on achieving high returns, but then is required to return that promoted interest at the end of the fund life if the fund as a whole did not hit the preferred returns it promised investors.

The Multiple Return Hurdle Model:In this model, we’ll build out a waterfall structure in which twodifferent hurdles need to be hit in order for the GP to earn promoted interest on the deal. For cases where you have an IRR hurdle and also an equity multiple hurdle, this will be your go-to resource.

The Cash-on-Cash Waterfall Model:In this model, we’ll build out a cash-on-cash based waterfall model. If you’re doing a deal that you don’t plan to sell any time soon, and want to get paid now (rather than after a return of capital), you’ll find this model extremely helpful. We’ll also include the build-out of a separate, back-end profit sharing structure, so you can customize the split of sale proceeds whenever you decide to sell the property.

We’ll also clearly explain what’s happening in each structure, behind the complex formulas that you see in Excel, so you know exactly how each structure functions in a real estate deal.

Here’s what some our students have had to say about the course:

★★★★★ “Very clear explanations! I like the repetition through the different examples to embed learning. It’s also helpful to say which shortcuts you are doing so that this becomes second nature.”

★★★★★ “This is amazing training. It covers those hands-on things which are hard to get without being into the CRE business. Very detailed, error-less explanation of complex scenarios.”

★★★★★ “Unbelievable course. I spent the weekend working through this and the prerequisite Equity Waterfall Modeling Master Class. This was the practical deep dive I needed to compliment my real world and academic exposure to Real Estate Private Equity.”

★★★★★ “Fantastic course, and just like with Justin’s other courses: crammed with great content and hands-on application. No fluff. Just into the materials and the mechanics. This course is rather advanced, but it covers a lot of different techniques, methods, and concepts.”

At the end of this course, you’ll be prepared to build a real estate equity waterfall model for any structure that’s thrown your way, whether you’re taking an Excel test for a real estate analyst or associate job at a real estate private equity or brokerage firm, or you’re syndicating capital to buy your first real estate deal and building out investor materials and models to calculate investor returns and promoted interest.

Ready to get started? Just click the enroll button and let’s start working through this step-by-step.

Looking forward to seeing you in class!

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Frequently Asked Questions

How long do I have access to the course materials?

You can view and review the lecture materials indefinitely, like an on-demand channel.

Can I take my courses with me wherever I go?

Definitely! If you have an internet connection, courses on Udemy are available on any device at any time. If you don’t have an internet connection, some instructors also let their students download course lectures. That’s up to the instructor though, so make sure you get on their good side!