Benavente Analyst Program

Month 2 BootcampReal Estate Development & Private Investments

A focused 5-day training plan for analysts learning how to think like real estate developers, private investment professionals, and credit-minded underwriters.

Duration
5 Days
Format
Videos + Excel + Discussion
Primary Goal
Underwrite and explain a simple deal
Final Output
5-minute investment memo presentation
Office Work Schedule
Choose who comes first — the other takes the remaining days
Slot A
Monday Evening Arrival
Work in office Tuesday + Wednesday
Slot B
Thursday + Friday
Work in office Thursday + Friday
Weekly Schedule

5-Day Learning Plan

Each day combines core concepts, vocabulary, practical exercises, and working video links.

Day 1

How Real Estate Deals Work

Capital stack, underwriting basics, sponsor vs investor, and deal economics.

Suggested Pace
Learning: 60–90 min
Video: 45–60 min
Excel: 60–90 min
Key Concepts
  • •Capital stack: senior debt, mezzanine, preferred equity, common equity
  • •What a sponsor does vs what an investor does
  • •How profit is created: buy/build below exit value
  • •Basic underwriting: cost, financing, timing, exit
Practical Exercise

Build a simple deal sheet with land, construction, soft costs, total cost, sale price, financing cost, and gross profit.

Video Checklist
The Capital Stack in Real Estate Private Equity
https://www.youtube.com/watch?v=sptgMhSDlF4
Capital Stack Commercial Real Estate 101
https://www.youtube.com/watch?v=fEXNcUKi2XU
Excel Assignment
Build a Capital Stack Breakdown
Video Tutorial
Excel Basics for Financial Modeling
Step-by-Step Instructions
  1. 1Create a new worksheet titled "Capital Stack Model"
  2. 2In Column A, list: Senior Debt, Mezzanine Debt, Preferred Equity, Common Equity, Total Capital
  3. 3In Column B, enter dollar amounts for each layer (use $5M total as example)
  4. 4In Column C, calculate the percentage of total for each layer using formulas (=B2/$B$6)
  5. 5In Column D, enter the cost of capital (interest rate) for each layer
  6. 6In Column E, calculate the weighted cost using =C2*D2
  7. 7Add a cell to sum weighted costs for Blended Cost of Capital
  8. 8Format with currency symbols, percentages, and borders for presentation
Practical Exercise in Excel
Simple Deal Sheet
Based on Today's Practical Exercise
Build the deal sheet from the Practical Exercise above
Step-by-Step Instructions
  1. 1Create a new worksheet titled "Deal Sheet"
  2. 2Row 1: Land Cost — enter $150,000
  3. 3Row 2: Construction Cost — enter $400,000
  4. 4Row 3: Soft Costs (permits, legal, design) — enter $50,000
  5. 5Row 4: Total Cost — use =SUM(B1:B3)
  6. 6Row 5: Financing Cost (12% annual on 9-month build) — use =B4*0.12*(9/12)
  7. 7Row 6: Total Basis — use =B4+B5
  8. 8Row 7: Sale Price — enter $750,000
  9. 9Row 8: Gross Profit — use =B7-B6
  10. 10Row 9: Profit Margin % — use =B8/B7
  11. 11Format cells: currency for dollars, percentage for margin
Manager note: Day 1 sets the language of the whole week. Make sure analysts can explain the capital stack out loud without reading notes.
Day 2

Credit & Risk — How Lenders Think

LTV, LTC, collateral protection, and downside thinking.

Suggested Pace
Learning: 60–90 min
Video: 45–60 min
Excel: 60–90 min
Key Concepts
  • •Loan-to-Value (LTV) and Loan-to-Cost (LTC)
  • •Collateral coverage and equity cushion
  • •Why lenders care about downside before upside
  • •Default, foreclosure, refinance, and maturity risk
Practical Exercise

Build an LTV table. Then test what happens if property value drops by 10%, 15%, and 20%.

Video Checklist
Loan to Value Ratio (LTV) in Commercial Real Estate Explained
https://www.youtube.com/watch?v=3WnMe0iHyZE
Khan Academy — Interest Tutorial
https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial
Excel Assignment
LTV Sensitivity Analysis Table
Video Tutorial
Excel Data Tables & Sensitivity Analysis
Step-by-Step Instructions
  1. 1Create inputs section: Loan Amount ($3.5M), Property Value ($5M)
  2. 2Calculate base LTV using =Loan/Value formula
  3. 3Build a sensitivity table with property values dropping: -5%, -10%, -15%, -20%, -25%
  4. 4Use formulas to auto-calculate the new LTV at each value decline
  5. 5Add a column showing Equity Cushion (Value - Loan) at each scenario
  6. 6Use Conditional Formatting to highlight LTVs above 80% in red
  7. 7Add a "Risk Zone" indicator using IF statements (Safe/Caution/Danger)
  8. 8Create a simple bar chart showing LTV across scenarios
Practical Exercise in Excel
LTV Stress Test Table
Based on Today's Practical Exercise
Build the LTV table from the Practical Exercise above
Step-by-Step Instructions
  1. 1Create a new worksheet titled "LTV Stress Test"
  2. 2Cell B1: Loan Amount — enter $3,500,000
  3. 3Cell B2: Current Property Value — enter $5,000,000
  4. 4Cell B3: Current LTV — use =B1/B2 (should show 70%)
  5. 5Create a table starting Row 6 with columns: Scenario, Value Drop %, New Value, New LTV, Equity Cushion
  6. 6Row 7: Base Case — 0%, =$B$2, =$B$1/C7, =C7-$B$1
  7. 7Row 8: Mild Stress — 10%, =$B$2*(1-B8), =$B$1/C8, =C8-$B$1
  8. 8Row 9: Moderate Stress — 15%, same formulas
  9. 9Row 10: Severe Stress — 20%, same formulas
  10. 10Add Conditional Formatting: LTV > 80% turns red, > 90% turns dark red
  11. 11Note which scenario causes LTV to exceed 100% (underwater)
Day 3

Development Economics

How real estate development actually makes or loses money.

Suggested Pace
Learning: 60–90 min
Video: 45–60 min
Excel: 60–90 min
Key Concepts
  • •Hard costs vs soft costs
  • •Carry costs: interest, taxes, insurance, overhead
  • •Development spread: sale value minus total cost
  • •Absorption and timeline risk
Practical Exercise

Model a spec-home deal: land, construction, soft costs, interest carry, expected sale price, and profit margin.

Video Checklist
Real Estate Financial Modeling — Townhouse Development Case Study
https://www.youtube.com/watch?v=lHJQRT8bcwY
Watch Me Build a Capital Stack with Mezzanine Debt
https://www.youtube.com/watch?v=PK_LmuSA5Js
Excel Assignment
Spec Home Development Budget
Video Tutorial
Building a Development Pro Forma in Excel
Step-by-Step Instructions
  1. 1Create sections: Land Costs, Hard Costs, Soft Costs, Carry Costs, Total Basis
  2. 2Land Costs: Purchase price, closing costs, due diligence
  3. 3Hard Costs: Site work, foundation, framing, MEP, finishes (itemize each)
  4. 4Soft Costs: Architecture (3%), permits (2%), legal (1%), contingency (5%)
  5. 5Carry Costs: Calculate monthly interest on construction loan, property taxes, insurance
  6. 6Use a cell for "Construction Duration (months)" and multiply by monthly carry
  7. 7Sum all sections into Total Development Cost (Basis)
  8. 8Add Expected Sale Price and calculate Gross Profit and Profit Margin %
  9. 9Test: What if construction takes 3 months longer? Update carry and see profit impact
Practical Exercise in Excel
Spec Home Deal Model
Based on Today's Practical Exercise
Build the spec-home model from the Practical Exercise above
Step-by-Step Instructions
  1. 1Create a new worksheet titled "Spec Home Pro Forma"
  2. 2Section A - Land: Purchase $120,000, Closing $3,600, Due Diligence $2,000. Subtotal =SUM
  3. 3Section B - Construction: Site Work $25,000, Foundation $45,000, Framing $80,000, MEP $65,000, Finishes $95,000. Subtotal =SUM
  4. 4Section C - Soft Costs: Architecture (3% of construction), Permits (2%), Legal $5,000, Contingency (5%). Subtotal =SUM
  5. 5Cell for Loan Amount — assume 80% of (Land + Construction + Soft Costs)
  6. 6Cell for Interest Rate — enter 12% annual
  7. 7Cell for Construction Duration — enter 9 months
  8. 8Section D - Interest Carry: =Loan*Rate*(Duration/12)
  9. 9Section E - Total Basis: =Land+Construction+SoftCosts+Carry
  10. 10Expected Sale Price: $750,000
  11. 11Gross Profit: =SalePrice-TotalBasis
  12. 12Profit Margin: =GrossProfit/SalePrice
Day 4

Returns & Investor Thinking

IRR, equity multiple, timing, and why delays matter.

Suggested Pace
Learning: 60–90 min
Video: 45–60 min
Excel: 60–90 min
Key Concepts
  • •Simple return vs annualized return vs IRR
  • •Equity multiple and hold period
  • •How timing affects investor returns
  • •Why a delayed sale can crush IRR even if profit still looks fine
Practical Exercise

Model a $200k equity investment returning $280k in 12 months. Calculate simple return, annualized view, and IRR.

Video Checklist
Khan Academy — Present Value
https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial/present-value-tutorial
Khan Academy — Time Value of Money / Interest
https://www.khanacademy.org/economics-finance-domain/core-finance/interest-tutorial
Excel Assignment
Investor Returns Calculator with IRR
Video Tutorial
IRR and XIRR Functions in Excel
Step-by-Step Instructions
  1. 1Create inputs: Initial Equity ($200,000), Exit Proceeds ($280,000), Hold Period (months)
  2. 2Calculate Simple Return: (Exit - Equity) / Equity
  3. 3Calculate Equity Multiple: Exit / Equity
  4. 4Build a monthly cash flow row: Month 0 = -$200,000 (negative = outflow)
  5. 5Month 12 = +$280,000 (positive = inflow)
  6. 6Use =IRR() function on the cash flow range to get monthly IRR
  7. 7Annualize: =(1+monthly_IRR)^12-1
  8. 8Create a scenario table: What if exit is delayed to Month 15, 18, 24?
  9. 9Show how IRR drops even though total profit stays the same
  10. 10Add XIRR version using actual dates for more precision
Practical Exercise in Excel
$200K Equity Investment Returns
Based on Today's Practical Exercise
Model the exact investment from the Practical Exercise above
Step-by-Step Instructions
  1. 1Create a new worksheet titled "Investor Returns"
  2. 2Cell B1: Initial Equity Investment — enter -$200,000 (negative = cash out)
  3. 3Cell B2: Exit Proceeds — enter $280,000
  4. 4Cell B3: Hold Period — enter 12 (months)
  5. 5Cell B5: Simple Return — use =(B2-ABS(B1))/ABS(B1) — should show 40%
  6. 6Cell B6: Equity Multiple — use =B2/ABS(B1) — should show 1.4x
  7. 7Row 10: Create monthly cash flow timeline: Month 0, 1, 2... through 12
  8. 8Row 11: Cash flows — Month 0 = -200000, Months 1-11 = 0, Month 12 = 280000
  9. 9Cell B13: Monthly IRR — use =IRR(B11:N11)
  10. 10Cell B14: Annualized IRR — use =(1+B13)^12-1 — should be ~40%
  11. 11Compare: What if you wait 18 months for the same $280K? Recalculate IRR.
Day 5

Objection Playbook & Final Deal Presentation

How to defend a deal and answer investor objections clearly.

Suggested Pace
Learning: 60–90 min
Video: 45–60 min
Excel: 60–90 min
Key Concepts
  • •What if construction delays?
  • •What if the market softens?
  • •Why not public markets?
  • •How is principal protected?
Practical Exercise

Build a sensitivity table for sale price, delay, and cost overruns. Then present the deal in 5 minutes.

Video Checklist
Capital Stack Commercial Real Estate 101
https://www.youtube.com/watch?v=fEXNcUKi2XU
Real Estate Financial Modeling — Townhouse Development Case Study
https://www.youtube.com/watch?v=lHJQRT8bcwY
Excel Assignment
Deal Sensitivity Matrix
Video Tutorial
Two-Variable Data Tables in Excel
Step-by-Step Instructions
  1. 1Start with your Day 3 or Day 4 model as the base
  2. 2Create a 2-way data table with Sale Price on one axis (-20% to +10%)
  3. 3Add Construction Delay (months) on the other axis (0, 3, 6, 9, 12)
  4. 4The intersection shows Profit or IRR at each combination
  5. 5Use Conditional Formatting: Green for target returns, Yellow for acceptable, Red for loss
  6. 6Add a "Break-Even" analysis: At what sale price do you lose money?
  7. 7Create a second table: Cost Overrun % vs Sale Price decline
  8. 8Write 3 bullet points summarizing: Best case, Base case, Worst survivable case
  9. 9This becomes your "objection defense" slide for the final presentation
Practical Exercise in Excel
Sensitivity Table for Presentation
Based on Today's Practical Exercise
Build the sensitivity table from the Practical Exercise above
Step-by-Step Instructions
  1. 1Create a new worksheet titled "Deal Sensitivity"
  2. 2Link to your Day 3 model — reference Total Basis and Sale Price cells
  3. 3Table 1 - Sale Price Sensitivity: Column headers: -15%, -10%, -5%, Base, +5%, +10%
  4. 4Calculate new Sale Price at each % change
  5. 5Calculate Profit at each scenario using =NewPrice - TotalBasis
  6. 6Table 2 - Delay Sensitivity: Row headers: 9 mo (base), 12 mo, 15 mo, 18 mo
  7. 7Calculate additional carry cost for each delay period
  8. 8Calculate new profit at each delay scenario
  9. 9Table 3 - Cost Overrun: Test +5%, +10%, +15%, +20% construction overrun
  10. 10Create a combined view: What if sale drops 10% AND construction delays 3 months?
  11. 11Highlight the "break-even" point where profit = $0
  12. 12Format with colors: Green (profitable), Yellow (marginal), Red (loss)
Vocabulary

Week 1 Financial Vocabulary

These are the terms your analysts should memorize and be able to explain in plain English.

Asset
Property or investment being analyzed
Capital Stack
The layers of financing in a deal
Equity
Ownership capital at risk
Debt
Borrowed money that must be repaid
Leverage
Using debt to increase exposure and returns
Sponsor
Developer / operator leading the project
Underwriting
Analyzing the risk and economics of a deal
Basis
Total cost invested in the deal
LTV
Loan amount divided by property value
LTC
Loan amount divided by project cost
Collateral
Asset securing a loan
First Mortgage
Senior debt with first claim on the asset
Bridge Loan
Short-term financing
Default
Failure to meet loan obligations
Refinance
Replacing existing debt with a new loan
Hard Costs
Physical construction costs
Soft Costs
Permits, legal, design, financing, and other non-construction costs
Carry Costs
Holding costs during the project
Absorption
The speed at which inventory sells
IRR
Internal Rate of Return; time-sensitive return metric
Equity Multiple
Total cash back divided by equity invested
Hold Period
Length of time the investment is held
Preferred Return
Priority return owed to investors before promote
Promote
Sponsor’s share of upside after hurdles
Waterfall
Profit-sharing structure
Development Spread
Value created over total development cost
Exit
Sale or refinance of the investment
Stabilization
When a property reaches normal operating performance
Cap Rate
NOI divided by asset value
NOI
Net Operating Income before debt service
Execution

Assignments & Evaluation

This is how you make the training practical instead of just academic.

Required Deliverables
  • ✓Build a simple development model in Excel
  • ✓Create an LTV/LTC downside sensitivity table
  • ✓Calculate carry cost for a 9-month construction period
  • ✓Show how a 10% drop in sale price affects investor return
  • ✓Present one deal in 5 minutes with clear risk explanation
Suggested Scoring Rubric
Concept understanding25%
Excel accuracy25%
Risk awareness20%
Presentation clarity15%
Vocabulary mastery15%
Final Presentation Prompt

“Present a simple spec-home or development deal. Explain the total cost, the financing, the expected exit, the profit, the main downside risks, and why principal is protected or not protected.”

Training Standard

What analysts should know by the end of this week

Deal Literacy
  • •Explain a capital stack
  • •Understand sponsor vs lender vs investor
  • •Read a simple development budget
Credit Awareness
  • •Calculate LTV and LTC
  • •Explain collateral coverage
  • •Recognize maturity and downside risk
Investor Thinking
  • •Discuss IRR and equity multiple
  • •Explain timing risk
  • •Defend a deal against basic objections