Investing in multifamily real estate will always start with a financial model. This is an annual only template designed for pure acquisitions, the operation of a given acquisition for up to 10 years, potential refinance, and potential exit. It has all the logic needed to plan out a joint venture with traditional Sponsor (GP) / Investor (LP) financing and distributions with an IRR Hurdle waterfall return schedule.

Assumptions Include:

Capital Structure

  • Purchase Price
  • CapEx
  • % of CapEx Financed
  • Remaining CapEx to Equity Requirement
  • Pre-Purchase fees
  • Financing Amount (LTV %)
  • Equity Contribution by Sponsor / Investor
  • Initial Loan Terms (if applicable)
  • Rent Rolls
  • Up to 5 bedroom types, each defined by…
  • Unit count (Input)
  • Monthly Rent per Unit (Input)
  • Current Annual Rent
  • % Under market
  • Market Rent per Unit (Input)
  • Market Annual Rent
  • Year 1 Rent Increase from Current (Input)
  • New Per Unit Rent
  • Per Unit Increase

Pro Forma

  • Annual Rent growth rate (per year)
  • Ancillary Income (up to 4 slots)
  • Vacancy per Year
  • Loss to Lease / Credit Loss
  • Starting OpEx and Yearly Growth...
  • 3rd party contractors
  • Turn Over
  • Repairs & Maintenance
  • Marketing & Advertising
  • Management Fee %
  • Payroll
  • Admin / other
  • Utilities (up to 4 slots)
  • RE Taxes
  • Property Insurance
  • Reserve per unit

Debt / Exit

  • Exit Cap Rate for Refi
  • LTV on Refi
  • Prepay penalty if applicable
  • Lender Fees
  • Refi year
  • Refi amortization rate
  • Final Exit cap rate (selling)
  • Exit year
  • Interest Only Period for Initial Loan
  • Waterfall Distributions
  • IRR Hurdle Rates
  • Cash Distribution Splits per Hurdle

Final output report includes an annual Executive Summary showing key financial line items and investor / sponsor contributions / distributions per period.

Also, there are a few switches that override the detailed income and expenses. This means if you want to do a quicker analysis, you don’t have to define each of the rent rolls individually or expenses and rather just define the total rent / growth and total expenses / growth.

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