How to Build an IRR-Based Waterfall Model in Excel

How to Build an IRR-Based Waterfall Model in Excel udemy course free download

Model preferred returns, IRR hurdles, and promote structures with confidence — step by step in Excel.

If you work in real estate, private equity, or investment analysis, you’ve probably seen — or been asked to build — a waterfall model. And if you’ve ever felt uncertain about how the tiers actually work, what the formulas are doing, or how to explain the logic to someone else, you’re not alone.

This course shows you exactly how to build an IRR-based investor waterfall from the ground up, using plain Excel and a clear, auditable structure.

We focus on the most common approach: a return of equity followed by an IRR hurdle, with promote tiers that reward the operating partner once certain return thresholds are met. You’ll learn not just what to do in Excel, but why it matters — and how to make your model flexible, accurate, and easy to follow.

Throughout the course, you’ll:

• Build a working waterfall model from scratch using standard formulas

• Calculate capital returns, IRRs, and profit splits across multiple tiers

• Understand how preferred returns and promotes are triggered

• Learn practical techniques to avoid common modelling errors

• Test the logic using built-in checks and structured inputs

All you need is a basic understanding of Excel and some exposure to real estate or investment cash flows. No macros, no VBA, and no shortcuts — just a step-by-step breakdown of how to model one of the most important structures in private capital.

By the end, you’ll have a working model and the confidence to use it, explain it, and adapt it to real deals.