Multifamily Proforma: Building the 11 Modules

A multifamily proforma is the financial framework behind an acquisition decision. It converts a rent roll, trailing expense history, deal terms, and operating assumptions into projected cash flow, valuation, and returns. Because each output depends on earlier inputs, the sequence of the model matters as much as the formulas.

The 11 Core Modules

1. Deal assumptions and timeline: Purchase terms, closing costs, unit count, acquisition date, hold period, and business plan.
2. Unit mix and rent roll: In-place rents, occupancy, lease dates, concessions, delinquencies, and unit types.
3. Proforma rents and growth: Market rents, loss to lease, renewal and new-lease spreads, and annual rent growth.
4. Other income: Parking, pet fees, laundry, storage, utility reimbursements, and other ancillary revenue, with vacancy, concessions, and credit loss shown separately.
5. Operating expenses: Payroll, repairs, marketing, insurance, utilities, taxes, management fees, and other costs, ideally normalized from trailing history.
6. Net operating income: Effective gross income less operating expenses. Debt service and capital expenditures should remain below NOI.
7. Capital expenditures and renovation scope: Unit renovations, common-area work, replacements, and turnover costs.
8. Debt and financing: Loan amount, leverage, rate, amortization, term, interest-only periods, reserves, and coverage tests.
9. Cash flow and distributions: Levered cash flow after debt service, reserves, capital draws, and partner distributions.
10. Returns and exit: Sale timing, exit valuation, disposition costs, IRR, equity multiple, and cash-on-cash returns.
11. Sensitivities and scenarios: Tests for rent growth, exit assumptions, renovation costs, and financing terms.

Build in Dependency Order

The rent roll and operating expenses establish the property’s current performance. Rent, other-income, and expense assumptions then create the projection, which flows into NOI, financing, distributions, exit proceeds, and return metrics. Avoid hard-coding values that another module calculates. Linking each output to a labeled input keeps the model auditable and makes review and stress testing more efficient.

Data Quality Matters

Proforma build-time estimates often assume that the rent roll and financial statements are already clean and structured. In practice, data preparation can represent roughly half of the work. Templates from providers such as HelloData, A Simple Model, and Adventures in CRE can provide useful starting structures, but their vacancy, reserve, expense-recovery, and financing assumptions should be reviewed before informing an investment decision.

View the complete multifamily proforma guide on Coastwise Analytics