Blud
Assumptions
The numbers behind a model, and how to change them.
What to ask
To: blud@capture-lab.com
Re: Meridian
What exit cap and rent growth are you using here?
To: blud@capture-lab.com
Re: FM 1461
Assume $70k an acre and run it at 175 lots. What moves?
To: blud@capture-lab.com
Re: FM 1461
Make that the base case.
To: blud@capture-lab.com
Our assumptions
We underwrite to a 6% exit cap and a 20% margin. Use those from now on.
The numbers
What Blud carries until you say otherwise. Anything off the record, a rent roll or a survey, wins over these. All of it is yours to move.
| Vacancy | 7% | Loan to value | 65% |
| Credit loss | 0.5% | Interest rate | 6.5% |
| Management fee | 3% | Amortisation | 30 yr |
| Rent growth | 3% | Interest-only | 12 mo |
| Expense growth | 2.5% | Min DSCR | 1.25 |
| Exit cap | 6.25% | Min debt yield | 9% |
| Hold | 5 yr | Discount rate | 10% |
Your targets
What a deal has to clear before Blud calls it worth a look.
| Spread over market | 150 bps |
| Levered IRR | 18% |
| Equity multiple | 2.0x |
| Margin on cost | 20% |
Trying against saving
Blud
Re: FM 1461
Residual moves to $4.1M and margin on cost lands at 21.4%, just over your target.
Nothing is saved to the project. Say the word and I'll make this the base case.
Asking runs the numbers. Saying so saves them.
Sensitivity
Ask how much room a deal has and Blud runs the grid, exit cap against rent or against build cost, and tells you where it stops working.
Your own model
Edit the workbook Blud sent and mail it back, and it reports what your changes did. Send your firm’s own template and it comes back filled in, macros intact.