Pro Forma Modeling a Single-Family-Home Community: ULI Online Live Workshop

Held over four sessions, this new online live program will focus on developing a single-family residential builder pro forma. The program will model and value a 50-lot single-family-home community. The model will assume the developer/builder is working with finished lots. Unlike a typical commercial model, this model does not include construction of an amortization table; instead, a residential builder uses a rolling facility. This construct will be explained in detail in session three of the course. 

Each session of the workshop will build on the previous one, with each participant having a completed pro forma model at the conclusion. To avoid the possibility of anyone falling behind, the completed stages will be distributed the evening before each session. 

Note: This program is designed to be interactive. The instructor will be available by e-mail between sessions to assist participants. However, if you cannot attend a particular session, it will be recorded and available to download and view at your convenience. 

Session 1: July 16, 2013 1:30–3:30 p.m. ET

The program will begin by reviewing the structure for a residential builder, including lot take-down (the program assumes use of finished lots), schedule, and valuation. Data sheets will be provided for use in later stages of development for this program to ease data entry and better facilitate model building.

Session Highlights:
  • Overview of the residential builder pro forma
  • Review of consistent naming conventions
  • Completed house-cost summary sheet (one page)
  • Understanding of what and how the model will be scaled and built upon over the next three sessions

Session 2: July 18, 2013 1:30–3:30 p.m. ET

The second session will focus on development of the schedule for lot take-downs and house starts and completions. The percentage draw for bank lending and for completion will be modeled in a schedule sheet.

Session Highlights:
  • Understanding of the schedule characteristics for a residential builder with lot take-down and purchase
  • Understanding that home construction can be summarized as to percentage of draws and completions
  • Understanding that the schedule is a principal determinant of value in a residential project
  • A developed ability to draw multiple elevations and house types in the residential builder pro forma model

Session 3: July 23, 2013 1:30–3:30 p.m. ET

This session will focus on developing the economic pages for the pro forma model. The revenue/expense page summary will be constructed. In addition, the income statement and cash flow (in/out) pages will be developed from which valuations will be completed. The data pages provided earlier will be incorporated into the model at this point. These pages include hard-cost house pricing, recordation table, a sales and marketing budget, and a production overhead budget.

Session Highlights:
  • Understanding of the basic components of revenue and expense cash flows for a residential builder
  • Understanding of the structure and incorporation of data pages and how these are incorporated into a residential pro forma model 
  • Understanding and completion of the mechanics of the total model, which includes the rollover structure for debt, i.e., a revolving facility
  • Clear demonstration of how to scale the existing model to a 500-plus-unit planned unit development (PUD)

Session 4: July 25, 2013 1:30–3:30 p.m. ET

The final session will focus on the complete cash flow for the project from "cradle to grave." A final valuation summary will be completed, demonstrating sensitivities to lot take-down velocity. The model will be reviewed in total, with each segment addressed to demonstrate how capital is used.

Further, demonstration of how to scale this model to a 500-plus-unit PUD will be provided. Additional items of expansion and complexity (e.g.. waterfalls) will be discussed as well.

Session Highlights:
  • A completed scalable and modular residential builder pro forma model that includes a lot take-down schedule, house-cost summary, and revolving credit facility
  • Understanding of the complete pro forma structure for a residential builder
  • Understanding of how to analyze and add scalability to an existing model
  • Understanding of how to scale the existing model further to include investment waterfall distributions, stochastic processes, portfolio analysis, and visual displays of results (this will be discussed but models will not be provided)

Roger P. Staiger
Managing Director
Stage Capital, LLC

Roger Staiger is managing director for Stage Capital LLC, an international real estate advisory firm providing expertise to clients in areas of global portfolio management and asset repositioning. Staiger, through Stage Capital, has successfully repositioned over $500 million in distressed and inefficient real estate projects globally.

During his 20-year career, Staiger has worked in a number of industries at senior levels. He was managing director for Constellation Energy’s retail commodity division, CFO for Caruso Homes, and a portfolio manager for a large commingled pension fund in New York.

Staiger holds multiple degrees, including a BS in electrical engineering, an MBA in investments, an MA in international transactions, and an MS in finance. Currently, he holds faculty positions in the real estate departments at Georgetown University and Johns Hopkins University.

Staiger makes numerous capital market and economic presentations to organizations internationally. He also appears regularly on television and is often quoted in national periodicals and local newspapers.
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