60-Second Skills: Drop-down Menus Made Even Easier

by Bruce Kirsch on March 31, 2015

Many moons ago we showed you how to use drop-down menus as part of your spreadsheets. These are handy in that you can toggle a variable, and by making that variable a driver of outputs, easily switch between a pre-set selection of list items as the input. For example, Valuation Basis: Forward NOI vs. TTM NOI.

The good news is that there is an even easier way to enter your list choices than creating a list in the spreadsheet grid itself. All you have to do is shown below.

After selecting the cell in which you wish the drop-down menu to appear, on the ribbon Data tab, select Data Validation > Data Validation

Then, Allow: List, and specify the text values in the Source field, separated by commas, and click the OK button.

Enjoy.

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Investment Committee Memorandum Components

by Bruce Kirsch on March 22, 2015

    • Investment Overview – executive summary of the opportunity
    • Property Description – existing and future physical property characteristics
    • Business Plan – how you will make money
    • Rationale – why this particular investment, and why now
    • Sponsorship – identification of principals and presentation of track record
    • Deal Structure – equity contributions by entity, description of any seniority/preferred/subordinate status
    • Cash Flow Waterfall – rules for the equity entity return of capital and return on capital
    • Sources & Uses – full capital structure (sources), and detailed total costs including transaction costs for acquisitions (uses)
    • Underwriting Assumptions - all of the inputs you made in blue in your pro forma
    • Returns – net cash flow, multiple on equity, NPV and IRR at the project level, and also at the individual partner levels
    • Sensitivities – a spectrum of returns scenarios given different underwriting assumptions (see here for an elegant way to build these tables in Excel)
    • Risks & Mitigants – what are the risks involved, are you going to mitigate or accept them?
    • Supporting Schedules
      • market info / trends
      • comps
      • cash flow / waterfall projections
      • location maps
      • demographics
      • photos / renderings, etc.

What did I leave out?

Valuate can provide beautiful graphics for many of these memo sections. You can simply do a screencapture (such as with free program Jing) and paste the relevant modules into your Word doc.

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