Certificate in Real Estate Development & Value-Add Investments Financial Modelling

This course will equip you with the knowledge to make investment decisions, identify and mitigate risks & deal with the intricacies of property acquisition, management, and disposal.

You will discover how to construct a robust financial model to assess the risk and return profile of development, re-development, refurbishment, and value-add investments.

Course Content

Introduction to property development and investment

  • Property development and investment as a business
  • Market overview & where to find opportunities and the pipeline
  • Development and investment strategies
  • Financial return metrics
  • Real estate economics & cycles – entry & exit planning
  • Exit strategies

Identifying and evaluating investment opportunities

  • Market analysis: The real estate market cycle and investment opportunities
  • Real estate investors: Hight Net Worth Invidividuals, Pension and Other Institutional Funds
  • Valuation for commercial and residential properties
  • Assessing Gross Development Values (GDV), key development costs, professional fees, interest costs and contingencies.
  • Financial analysis: Discounted Cash Flow (DCF), profit on cost calculation, IRR, NPV, equity multiple
  • Maximum bid price for site

Obtaining planning permission and enhancing existing planning permission

  • Planning permission explained
  • Types of permits (no planning, outline, permitted development, full permission, enhancement potential)
  • Pitfalls to watch for and managing expectations

Structuring the offer for the site

  • Reducing capital requirements: Purchase options explained
  • Delayed completion options
  • Full cash offers
  • Landowner joint-ventures
  • Aligning capital in a bid to offer for the site
  • Landowner taking back 2nd mortgage on site
  • Overage agreements
  • Assessing the legal title and searches

Construction and project management

  • Contracting, monitoring works and phase completions
  • Cost control, overruns and how to deal with budgets
  • Setting up the professional and advisory teams: from quantity surveyors, to architects, accountants, construction companies, financial modelling & control, joint-ventures partners, solicitors and lawyers, and tax advisors
  • Sourcing, engaging and motivating the team

Funding and financing the real estate project

  • Sources and types of funding available: rates, sample terms and investment structures
  • Principles of corporate finance: picking the right capital structure to fund the property development project
  • Forward funding
  • Typical senior debt terms and structures
  • Typical mezzanine debt terms and structures
  • Sourcing additional equity
  • Inter-creditor and shareholders agreement
  • Basics of development loan structures
  • Lending criteria and typical capital structures
  • Lending fees

Introduction to UK Taxation of Real Estate

  • Principles of taxation for real estate
  • Property taxes and financial returns
  • Taxes on acquisition, development, occupancy and disposal
  • Off-shore versus on-shore companies’ taxation

Exit options, sales, marketing strategy and tactics in practice

  • Marketing and client segmentation
  • International investors and marketing overseas
  • Marketing strategy and tactics for your project
  • Estate agents: structures, hiring and firing
  • Structuring offers for buyers
  • Controlling sales and marketing budget

Sustainability in real estate

  • The value of green buildings
  • Sustainability certifications
  • Environmental, social and governance for development and investing
  • Well-being in real estate
  • Property Management
  • Property management requirements and strategies
  • Asset management plans, processes and control techniques

Case study:

Value-add development in West London

Best practice in financial models

  • Simple tips to help you become an efficient financial modeller
  • How to avoid errors and present your models in a persuasive way

Implicit investment valuation methods

  • Term & Reversion
  • Layer / Hardcore
  • Property yields
  • Defining term and reversionary yields
  • Calculating the equivalent yield

Build your cash flow from scratch

  • Inputs: passing rent, estimated rental value, initial and exit yields, market growth, review cycles and most importantly, target returns
  • Outputs: internal rate of return, net present value and worth
  • Annual and quarterly discounted cash flows: modelling purchase price, passing rent, rent reviews, exit rent and exit price

Gearing / Leverage

  • Adding senior debt “bullet” loan

Analyse the results

  • IRR, NPV and Worth
  • Data tables & sensitivity analysis
  • Risk visualisation (charts)

Case study:

Single-tenant office building in the UK

Multiple tenant properties

  • Modelling tenancy schedules and rents forecast
  • Rent reviews, upward-only, break options, lease expiry
  • Modelling hypothetical second leases
  • Void period, rent free and estimated rental values

Time-varying rental growth

Net Operating Income Forecast

  • Modelling capital expenditure for refurbishment and operating costs (letting fees, void costs, empty rates)

Investment decision

  • When to accept the project and make investment recommendation

Case study

Multi-tenant office building in the UK

Residual Valuation Appraisal

  • Property Yields
  • Land Value
  • Profit Appraisal
  • Gross and Net Development Values
  • Return on GDV, Cost and Equity

Pro-forma development cash flow


Timings: purchase date, works start date, planning, lead in, construction and refurbishment, void period, lease start, sale date

  • Revenue: sales proceeds, estimated rental value per sqf, net internal areas, rental growth and target returns
  • Development Costs: construction and refurbishment, site purchase and vacant possession value, contingency, professional fees, statutory costs, allowances and rights
  • S-Curve vs. Straight Line


  • Internal Rate of Return (IRR)
  • Net Present Value (NPV)
  • Maximum Bidding Price
  • Total profit, profit on cost and equity multiple

Financial viability testing & risk analysis

  • Data tables & sensitivity analysis
  • Risk visualisation techniques

Case study: 

un-geared office redevelopment in the UK

Development finance

  • Debt & Equity Structures
  • Senior Debt
  • Mezzanine Loan

Geared cash flow

Debt Types

  • Rolled-up interest senior debt
  • Equity first capital deployment waterfall
  • Debt repayment structures for development finance

Joint-venture structures

  • Equity waterfall structure
  • Preferred returns
  • Promote Cash Flow

Capitalised interest & circularities

Case study:

geared office redevelopment in the UK

Lead-in period

  • Current in-place leases, operating expenses – vacancy costs, including rates and empty costs
  • Site acquisition including options, pre-development and planning costs
  • Equity and debt drawdowns, including mezzanine finance

Construction period

  • Development hard and soft costs using S-curve, Straight line and Known curves
  • Construction finance drawdowns following an equity-first model

Lease-up and stabilisation period

  • New leases with gross and net lease clauses
  • Tenant incentives such as rent-free and capital expenditure contributions
  • Operating expenses – delayed rates, letting fees, service charges and void costs

Investment options modelling

  • Lease re-gearing, hold or sell
  • Re-develop, refinance and hold
  • Re-develop, stabilise and sell

Sources of funds

  • Calculating debt and equity peaks
  • Modelling the debt repayment waterfall
  • Calculating total cost of debt (interest and fees)

Carried Interest / Promote Structures

  • Profit shares and preferred equity returns
  • Equity returns based on different IRR tiers

Risk modelling and presentation

  • Sensitivity analysis (2-way data tables)
  • Scenario analysis
  • Financial ratios: IRR, NPV, Residual Land Value, Profit on Cost, Profit on GDV, Equity Multiple

This course is targeted at those who are new to the real estate sector and wish to become property development experts.

Chris White

"I approached Cambridge Finance to get better at excel from both a cost management perspective and because I am an investor myself. The course was very informative; the excel shortcuts were useful and will allow me to be a professional at excel - not to mention show off to my colleagues.

Chris White
Finance Director
Nouf Khaled Al Swailem

"I would like to express my gratitude and best wishes for our mentor and instructor, Maria Wiedner, for her incredible dedication and patience throughout this course."

Nouf Khaled Al Swailem
Finance Director
Sports Boulevard
Dates & Prices
DurationDuration CPD HoursCPD Hours LocationLocation LevelLevel DatesDates
7 days 49 The Cumberland, London/Online Beginner - Advanced

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