Value-Add Apartment Investing: Renovation Premiums, Unit Turn Schedules, Rent Uplifts, Expense Ratios & Refinance Proceeds

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Summarise a fictional 24-unit building's rent roll by unit type – units, total and average rent – compare it with market rents for classic units and work out the monthly loss to lease.
• Compare three fictional renovation packages on return on cost and payback, price the plan per unit type with XLOOKUP and total the renovation budget including a contingency.
• Plan when each unit can be renovated: the date it comes back on the market after its package's downtime, how many leases end each month, the downtime in unit-months and the rent the building gives up during the works.
• Track the building month by month through the works – classic units still let, units in works, renovated units waiting for a tenant and renovated units let at the premium – and turn that into rent income and effective gross income for the year.
• Turn a fictional expense budget with three kinds of lines – per unit, fixed and % of income – into USD per year before and after the plan, compare the expense ratios and work out the NOI uplift.
• Value the building before and after the plan with fictional cap rates, compare the stabilised NOI with the total project cost as a yield on cost and work out the value the plan creates.
• Size a new loan on the stabilised building as the lower of a loan-to-value limit and a debt-service-coverage limit worked out with PMT, then compute the cash returned to equity, the equity left in the deal and the cash-on-cash return after the refinance.
• Add up five years of cash flows to equity, compute the IRR and the equity multiple, build a sensitivity grid of the stabilised value by rent premium and exit cap rate, and chart the cash flows.