The team at JKP has a vast amount of experience performing real estate financial analysis to provide our clients with a complete understanding of the projected costs and returns of their real estate projects. A proper real estate financial analysis is detailed and intensive, accounting for every foreseeable cost and return. This information is then presented within a financial model that is accessible and easy for our clients to understand.
The steps taken by JKP’s financial analysts to achieve financial understanding of a project are as follows:
Back of the Envelope Analysis (BOE): This is a quick analysis that produces a “ballpark figure” for a project’s cost of production and rate of return. This calculation is achieved by taking into consideration the project’s cash flow, purchase price, down payment, loan amount, amortization, and rental costs. Depending on the results of this approximation, we will advise you on the appropriate course of action.
Research Analysis: A multi-step process that includes considering current industry trends and project specifics to gauge the overall feasibility of the project, as well as to determine and value its future cash flow.
Pro Forma Modeling: We produce detailed models to illustrate the projected financial return of an investment in an effort to gauge whether a real estate investment would be worth pursuing.
Waterfall Modeling: An investment waterfall refers to the method of divvying up the return that a project generates between its investors. This can be a complicated process, as there are many different revenue streams that have to reach a variety of different partners and contributors.
Valuations: A valuation is provided to potential investors in order to justify the price of an investment property. This valuation is based on the anticipated IRR and equity model as determined by a pro forma model. An accurate valuation is important in order to protect an investor from financing a project that will ultimately be worth less than the amount invested.
Property Utilization Strategy: This involves conducting research and analyzing several factors to determine how to utilize a piece of real estate in order to optimize your project and generate the highest possible return.
For further information about how to your project can benefit from JKP’s real estate investment analysis and financial modeling, contact us by phone at (914) 733-2512.