From the course: Real Estate Deal Structuring: Introduction to the Waterfall Framework
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Rental income with waterfall
From the course: Real Estate Deal Structuring: Introduction to the Waterfall Framework
Rental income with waterfall
- So, here this model is designed specifically to evaluate rental income properties, and we have all these assumptions around an income, rental income property, where you have the rents, purchase prices, any renovations, timing, financing, exit assumptions around what you're going to sell it at, and other assumptions that affect the rents that are collected. And this gives you a return on the project level what the project is expected to return. Now, if you were making the investment yourself as an individual investor, those are the returns that you can expect. But what happens when you're investing with other folks, right? So, then that's where the investor assumptions come in. Now, this should be very familiar to you by now, you've seen it many times. This is exactly the same as the waterfall framework that was introduced earlier, so let's see what that looks like. So, here, again, there is four tiers that are available, but by default, the second tier and the third tier here is…
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