Open Case - Questions to Ask & Structuring

Hi,

In terms of clarifying questions you have to understand:

1. Required returns
2. Time horizon
3. Current investment capabilities ($)
4. Any other preferences or limitations (Type of real estate assets, geographical, particular investments in mind, etc)

Would not come not recommend any structure at this point, since depending on the answers it can be completely different cases:

• Understanding the real estate price trend in a particular country
• Feasibility of the particular investment
• Understanding if a certain business case (e.g. hotel franchise real estate) makes sense
• Etc

Pls don't fall into the temptation of structuring things before you collect all the information

Best!

Hi,

There is always more that you can understand. For example, if you understand the goal as improving profits, there's so much more you can ask - do they have a % change target in mind, how long do we have to turn this around, do they prefer this to be done through raising revenue or cutting costs, etc.

I always write BOTMG at the bottom of my framework page to help myself think of things I'm missing in case I'm stuck.

This helps "trigger" you to consider questions around B = Business Model, O = Objective, T = Timing, M = Market, G = Geography.

However, you should never just say "so, what is their business model?" Obviously, ask questions that help you frame your hypothesis, understand the situation, and ultimately drive your case better.

Hi,
I confirm objectives, budget and info about the market are the clarifying questions you have to focus on. About the structure, I would conduct a benchmark with other forms of investments considering the key KPIs of expected return (ROI, ...), timing (breakeven, ...), exit options, risks, capabilities, effort. You should weigh them starting from the client objectives. If real estate is the best investment option, you can think about an implementation plan (set-up a team, benchmark all the options in the market, funding, ...).

Hope it helps,
Antonello

(edited)

Hello!

What is being tested with this question is your ability to structure something vague and with little information.

My advise would be to:

1. Understand fully the target of the client: whether is and ROI of X years, increase presence for whatever reason, consolidate a market, etc. Once you have this clear, you can do simple canculations for the go/no go decision -that is what it´s beeing asked here-.
2. Understand your clients and its particularities: it would be a mistake to draw conclusions only knowing the target and the market. What would be a terrific invesvement for some people would be terrible for others, so you need to invest time in learning what´s the EXACT situation -financially, in terms of targets, presence, alternatives, risks, etc.

Hope it helps!

Cheers,

Clara

Hello,

If he gives you information about the market, you can easily estimate the return of the investment and calculate the NPV. The NPV is always a basic and good approach to evaluate an investment.
Remember, before giving an answer, also to evaluate the risks of the business and potential alternatives to the real estate.

Best,
Luca