When To Use Tactica Proforma Analysis Templates
Excel proformas models are like golf bags. Your skill level, goals, budget, and preferences will determine the bag's contents.
If you golf for the first time, four or five clubs may be all you need. If you're like me and only play a few times a summer, a basic set of used irons and a hand-me-down driver and putter are sufficient. If you're on the PGA tour, the newest technology, multiple wedges, woods, and a knowledgeable caddy are necessary.
Excel templates to evaluate real estate are similar. Just getting started and want to buy a duplex? You probably don't need the 20-tab template your college roommate uses to evaluate high-rise apartments for her P.E. employer.
Conversely, analyzing $100+ million development projects with investor money probably needs something more refined than a simple "one-pager."
Over the years, I have become incredibly well-versed in understanding the strengths and weaknesses of Tactica tools and which investors they best serve.
What to Expect From a Tactica Proforma
I build every paid proforma model to accomplish three things:
Stress the projects (best AND worst-case scenarios)
Obtain financing
Attract equity investors
Stressing The Project
Every model can be easily adjusted to increase residual cap rates, change rental assumptions, increase expenses (construction and operating), and slow down leasing velocity (development). Forecasting how returns look in a sub-optimal environment is necessary for any prudent investor.
Obtaining Financing
You can quickly print a few tabs "as PDF" and send your proforma to a lender. I've never once received feedback that a Tactica tool wasn't detailed enough from a lender's point of view.
Attracting Equity Investors
You can quickly export a few tabs "as PDF" to show potential suitors the project cash flows and the Sponsor/LP distributions in various distribution models. If you're excited about a project's potential, presenting that to investor(s) will be seamless.
If a proforma can do those three things while not being bogged down by complexity, the exercise is a success. Any new features I consider that add complexity without improving one of the three objectives above are dismissed immediately.
The Right Fit
Some groups are more sophisticated and require specific details that Tactica models don't showcase. Tactica tools aren't an excellent solution for every firm, and that's okay.
Early in the life of a new model, I receive feedback on the paid tools that help us rapidly improve the product. Over time, they evolve into a reflection of the customers using them (it's quite a remarkable phenomenon).
As our models mature, feedback slows down, and customization requests are minimal. One of the most common requests for mature models is to rebuild them with entirely different logic. Some groups love the look and feel but want features that can't be easily implemented into the existing structure.
In other words, people sometimes want a tool that Tactica models are not. It can feel like "trying to fit the square peg in the round hole."
Tactica will no longer service these requests primarily because it takes us away from the greater goal of innovating our tools (free and paid), creating better tutorial content, and writing thoughtful blog posts related to CRE.
Target Market
Tactica is a resource for the real estate participants below the private equity/institutional tranche. We also shouldn't be the first proforma you have ever used. The happiest customers have experience with real estate investing and are usually upgrading from an antiquated, bug-filled Excel model that needs to be put to rest.
Common Disqualifying Requests
Below is a standard list of features site visitors will request that disqualify a Tactica Model as a good fit for their business.
Monthly cash flow/return metrics instead of annualized
JV Structures requiring monthly equity contributions during development projects
Complex asset management arrangements
Complex capital stacks beyond equity and debt
Models tailored for JV/Institutional investors offer much more sophistication and optionality. I'd be happy to recommend other resources if this is what you're looking for before making a purchasing decision,
Our Model Mission
Tactica would rather have a visitor avoid purchasing a proforma model if it means they'll be unhappy with it. Thankfully, this is a rare occurrence, and since starting Tactica, I can count on one hand the customers that have taken issue with a Tactica paid tool.
The overall satisfaction with the models is due to two factors:
Expectations & Transparency
For the model's price, you're getting countless tutorials, instructional videos, and other ancillary content that are all public and that you can review before you make a purchasing decision.
I implore interested visitors to review informational materials and always ask me questions before committing to a purchase. As many can attest, I'm not afraid to tell you when a Tactica tool is not a good fit for your business plan.
“Suggestion Box” Strategy
In 2022, I decided to eliminate offering model alterations and customizations for customers. As I've continued to improve tools over the years, these requests have become rarer, but they occasionally surface, as I detailed earlier.
I take suggestions from customers and potential customers alike. If I get the same feedback from multiple parties, there is a high likelihood that I will move forward with their proposed idea (assuming it's possible). I can't promise that I'll implement all customer ideas. Before green-lighting an idea, I must consider ALL current and potential future customers.
Fulfilling Suggestions
Unfortunately, there are instances where groups have a quirky project or a unique partnership arrangement with their LP and suggest I "improve" the model with a feature that will help them underwrite a rare circumstance. In these situations, the questions I ask myself are:
Will the majority of other users benefit from this change?
Will the feature keep the model clean and simple?
If either answer is "No," I will not proceed with the suggestion. Model improvements must benefit most users and not add unwarranted complexity that could confuse and frustrate users.
“Suggestion Box” Strategy Benefits
This strategy will allow multiple benefits:
Ease of Implementation
Cost-Effectiveness
More Impactful
Ease of Implementation
I take pride in updating and improving my financial models over the long run. A proforma model is never complete. It should always be a work in progress adapting to the changing investment environment.
In the past, it's been problematic when a customer wants alterations because I continually update the model and improve them after completing an alteration assignment. Unfortunately, there is no way I could update every "custom model" with the latest changes I rolled out on the "standard" model. It would be impossible, and this has always bothered me.
This predicament has left some groups in a bind. They either have to continue to use their outdated model with their unique customizations or pay Tactica again (although reduced) to update the latest standard version with the same updates as before.
Cost-Effectiveness
It's become apparent that good suggestions come in bunches. Usually, somebody else will feel the same way if you think something blatant is lacking. Once enough people are interested in a change, I can revise, implement, and roll out updates to the customer. Thanks to your input, the highest priority features will be the ones I publish first.
More Impactful
Have you ever opened an iPhone or Android app after a long period of limited use and thought, "Wow, this interface has improved!" That's my goal with these models. Even if you aren't active with suggestions or have an idle period where you're not analyzing as many deals, you know that Tactica is still working behind the scenes to improve your product when it comes time to dust it off.
Summary
The Tactica models exist to help buyers stress projects, obtain financing, and attract equity investors. While I look forward to adding new features to these models in the future, the key to any Tactica tool is keeping them simple and efficient. That's what sets them apart.
I look forward to the feedback from our customers to keep pushing forward without losing focus on the overall goal.
