Problem Statement

Our client, an investment property real estate company, had been seeking a high-potential residential income property to diversify their portfolio. They had a wealth of knowledge regarding the sector but lacked financial modeling skills to obtain an honest measure of profitability and determine its suitability as an investment in the property. Knowing the need for a strategic partner to fill the gap, they approached us.

TAG’s Actions 

• We conducted a market research exercise on rental patterns and vacancy levels with the aim of providing strategic insights to our client. This involved examining historical and up-to-date market data, recognizing emerging trends, and evaluating regional and sectoral factors influencing rental yields and property demand. We embedded all these research findings into their financial models so that real-time market conditions can be represented to obtain increased precision in forecasting and scenario planning.
• We developed a complex cost model to estimate the cost of renovation of the property under various scenarios of the market. It features a highly sophisticated module for calculating viable exit routes. The information fed into the module, including the client’s market trend report, estimated property values, and applicable ROI benchmarks, allow the client to determine the best selling or leasing opportunities. This forward thinking prepares them to effectively navigate changing market conditions, respond to economic fluctuations, and make informed decisions that optimize profitability while minimizing risks.
• We created an extensive pro forma financial model forecasting major financial indicators, allowing the client to receive a detailed and future–oriented analysis in terms of receiving inputs regarding business goals. It comprised significant forecasts regarding revenues, costs, cash flows, and profitability. This will subsequently provide us with a realistic financial profile under all the various possible scenarios.

The Benefits 

By the stringent use of due diligence, we went about our clients with a systematic and strategic examination of their investment prospects. Financial modeling and examining financial information, market conditions, competitive environments, and possible risks to discover actionable knowledge in aid of more pertinent decision-making gave us insight and strong ways of ascertaining certain opportunities for growth in investments, feasibility with regard to possible investments, and avoidance of risk when investing. By offering customized guidance based on rigorous analysis, we enabled our clients to be sure of navigating challenging market conditions in order to obtain sustainable investment results.