Model question - How to model for multiple investors?
Hello all!

I am getting back into real estate development and have been out of the industry for about 18 months so I ma reteaching myself to model. With that being said, I am finishing up a model for an interview and am stuck on the remaining few steps. Can you please help out? I have attached a screenshot below. 

If you have any question, please don't hesitate to message me.

Thanks so much!

https://preview.redd.it/7i1w8zh4cld41.png?width=1262&amp;format=png&amp;auto=webp&amp;s=7edfdd1f4213b51add27bb4bf25214d21118091c
[{"id": "ffuvb00", "text": "You do it with a waterfall structure. One way to model this is to set up a monthly cashflow sheet. Calculate the return for Investor A and distribute 100% of their cash until their return hits 12%. Then calculate the return for Investor B and C and distribute 80/20 until they hit their 8%. Then split cash 50/50.\n\n&amp;#x200B;\n\nYou can look up \"adventures in CRE\" for a good waterfall model that explains this.", "replies": [{"id": "ffuw8dt", "text": "Pretty much this^ it helps to use the solver tool in excel to solve for x % return and so on", "replies": [{"id": "ffvegwt", "text": "Or to make it iterative you can structure it as a reserve essentially with contributions increasing the balance and distributions paying down the balance. The reserve will accrue at 12% and then the waterfall can flow down to tier 2 because you know the exact distribution investor 1 needs for a 12% IRR", "replies": [{"id": "ffx0a8x", "text": "Yes but I think that gets harder when you have multiple promotes because the splits continue to change. It\u2019s also easier to perform with solver when you are performing a recalibration analysis and there are periodic distributions to enter", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "ffxx1au", "text": "I already setup a 5 year annual cashflow model so that is all taken care of. The only thing that was tripping me up on this was the capital stack. The capital stack is as follows:\n\n\\-$60 million bank debt\n\n\\-$30 million from investor a\n\n\\-$8 million from investor b\n\n\\-$2 million from investor c\n\nAlthough this is equivalent to $100 million, the purchase price of the asset is roughly $134 million based off of the provided cap rate so i'm not sure how to account for the remaining $34 million (or if I don't have to). \n\nRegarding the waterfall model,\n\nI took a look at their videos but the formatting is just a bit different so I was having a hard time adapting these requirements to their formatting.", "replies": [{"id": "ffy31df", "text": "Do you mean that the sale price of the asset is 134 mm? That means there is roughly 34 mm to distribute to the investors after they get their initial investment back. IF the purchase price is 134 mm and you only have 100 mm then yes you are right you have a problem and you should seek clarification.", "replies": [{"id": "ffyibv6", "text": "The problem provides no purchase price. Only a going in cap rate so based off of that, after calculating the NOI, I was able to calculate the purchase price (as well as the sale price). The purchase price I calculated was $134 million and the sale price at the end of 5 years was $156 million.", "replies": [{"id": "ffyo0sw", "text": "i think youre right, theres a disconnect between the purchase price and the sources of capital. if you're 100% sure you are calculating initial NOI correctly and you are 100% sure that the capital stack is correct then I'm not sure what to tell you. =/", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}]