Executive Summary
Business
Description:
I did my final project for the
company at which I interned last summer, Key Property Investing. Key Property Investing (KPI for short) has acted as a
general partner in the distressed, single family home market to several
different private equity shops and hedge funds. Their main function is to find
distressed single family home markets and persuade investors to give them money
in order to purchase these properties in the investors name, rehab the
residence, “stabilize” the property with renters, and to then bundle up several
hundred homes at a time to then sell them as asset-back securities to large
institutional investors.
System Description:
In order to convince sophisticated investors
to give them millions of dollars, KPI has created their own very complex,
iterative model that had a very simple, slow macro that maximizes returns of an
investor by solving for the ideal number of homes to buy each month for 10
year, or the scope of the investment if shorter. This macro takes approximately
2 hours to run. I created a new macro that very accurately predicts the number
of monthly purchases will be the optimal amount, thereby reducing the average
optimization time to 54 seconds. Yes…seconds. I then picked 3 of the most
influential inputs, the model has over 50 inputs, and created a macro that will
run many variations of the model with differing levels in each one to determine
how the investment will be most profitable.
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