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Preview of Single Transaction Equity Joint Venture Waterfall Modeling Bootcamp | Level Three Certification

Lesson
Materials

Overview

In this lesson, you will learn about equity joint venture (JV) partnership investment cash flow waterfall modeling.

Passing this lesson’s quiz bestows REFM Excel for Real Estate Level 3 Certification.

Instructions

1. Download the files from the Materials tab above
2. Watch the video, and follow along and perform the exercises in the Excel file linked below
3. Take the Sample Questions quiz first and review the quiz commentary on the correct answers
4. Take the graded quiz in a single timed sitting, noting your score and the group average score
5. Review the quiz commentary on the correct answers.

Tutorial Videos

If you have not done so already, please view our 10-minute introductory video on JV Partnership Basics.

Topics Covered and Exercises/Solutions Included

  • Rationale behind targeting disproportionate returns to the Sponsor
  • How to achieve disproportionate returns through fees and partitioning of cash flows
  • Preferred Return overview
  • Preferred Return variations with respect to priority of payment
  • Preferred Return in context (Payment Types A, B and C)
  • Nature of Preferred Return (Non-compounded/compounded, non-cumulative/cumulative)
  • Annual Preferred Return Exercise
  • Monthly Preferred Return Exercise
  • Waterfall Distribution overview, with Animation
  • Promote Mechanism overview and modeling
  • Look-Back Internal Rate of Return (IRR) Method
  • 3-Tier Waterfall modeling
  • Double-Promote, 5-Tier Waterfall modeling
  • Double-Promote Exercise
  • Alternate Compounding Periods: Monthly, Daily, Quarterly
  • Sample Partnership Structures
  • Claw-Back overview and modeling
  • Claw-Back Exercise