Multifamily underwriting$165,000/unitAs of Oct 24, 2026

Untitled Multifamily Deal

100 units · 87,000 sq ft · 5-year hold

At $16,500,000, the deal returns the outside investor 17.7% a year and 2.14x over 5 years, on $7,177,250 of equity and a $10,725,000 loan.

LP IRR

17.7%

after promote

LP multiple

2.14x

5 yrs

Going-in cap

6.44%

exit 5.75%

Yield on cost

7.24%

stabilized / total cost

Min DSCR

1.63x

worst year

Equity required

$7.18M

LP $6.46M

Schedule

The capital plan runs through month 24 of a 5-year hold, and the sale closes at the end of year 5.

Yr 1Yr 2Yr 3Yr 4Yr 5

Exterior, roofs & amenities

$200K

Interior renovations — phase 1 (50 units)

$175K

Interior renovations — phase 2 (50 units)

$175K

Stabilized operations

Months 25 to 60

Sale

Purchase to sale

Each phase holds its own inputs and shows what they add up to, so a change and its result sit side by side.

AcquisitionClosing

$16,500,000 purchase, $17,902,250 of total capitalization once closing costs, fees, the capital plan and the reserve are in.

Deal

Multifamily

NameAddressMarketDeal type

Acquisition

$16.5M · $165,000/unit

Purchase price$Closing costsⓘ%Acquisition feeⓘ%Operating reserveⓘ$

Total capitalization: $17.9M
Equity required: $7.18M
Price / unit: $165,000
Going-in cap: 6.44%

Total capitalization is price plus closing costs, the acquisition fee, the whole capital plan and the reserve — loan-to-cost is measured against the finished project, not against day one.

Capital planMonths 1 to 24

3 lines totalling $550,000. Add, remove or retime lines here and the schedule above follows.

Development & Capital Plan

$550K · thru mo 24

$550K total · $0 at close · $550K lender

CloseMonth 60

Months run from closing: 0 is wired with the purchase, 1 is the first operating month. Spend spreads evenly across the range, and rents step up the month after an item finishes — so moving an end date moves the revenue with it.

Rent rollYear 1 EGI $1.79M

Rent Roll100 units

$2.05M GPR

Unit type	Qty	SF	In place	Market

Vacancy%Bad debt%Concessions%Other income ($/unit/mo)ⓘ$Annual turnoverⓘ%Rent regulationStabilized loss to leaseⓘ%

Upload comps (CSV)No comps yet

Columns: address, zip, beds, baths, sf, price or rent, date, source link. A kind column saying “rent” or “sale” settles anything ambiguous; without one, anything under $25,000 is read as a monthly rent. Common MLS header names work unedited, and uploads add to the comps already here.

Gross potential rent: $2.05M
Loss to lease: $193K
Avg in-place rent: $1,478
Avg market rent: $1,706
Year 1 EGI: $1.79M
Year 1 occupancy: 94.0%

Rents sit 13.3% under market. That gap closes as leases roll and as the capital plan delivers, whichever is faster — the two do not add up, because a renovated unit has already re-priced.

Operating expensesYear 1 NOI $1.06M

Operating Expenses

$728K · 41% of EGI

Reassess taxes on saleⓘEffective mill rateⓘ%Insurance$Utilities$Repairs & maintenance$Payroll$General & administrative$Marketing & leasing$Contract services$Management feeⓘ%Tax growthⓘ%Reserves ($/unit/yr)$Reserves above the NOI lineⓘ

Year 1 expenses: $728K
Per unit: $7,277
Expense ratio: 40.7%
Year 1 NOI: $1.06M

Reserves sit below the NOI line, matching how cap rates are quoted. Turn the switch on if your exit cap was struck after reserves.

Financing$10.7M loan

Senior Debt

$10.7M · 65% LTV

Use debtMax LTV%Max LTC%Min DSCRⓘMin debt yield%Interest rate%AmortizationyrsInterest onlymoOrigination fee%Loan termⓘyrsExit feeⓘ%Fund capex as a holdbackⓘ

Lender test	Allows
Loan to value← binds	$10.7M
Loan to cost	$12.5M
Debt service coverage	$11.5M
Debt yield	$11.8M

Loan amount: $10.7M
Year 1 DSCR: 1.63x
Year 1 debt yield: 9.90%
Min DSCR in hold: 1.63x

Sized on the amortizing constant the way a lender underwrites it, so an interest-only period buys coverage in the pro forma but not proceeds at sizing.

Seller Note

None

Seller carries paperⓘNote amount$Coupon%Interest onlymoAmortizationⓘyrsBalloonⓘyrsRefi test rateⓘ%

Mezzanine / Preferred

None

Add a gap trancheⓘCombined LTV%Coupon%Paid in cashⓘ%

Equity & Waterfall

$7.18M · LP 90%

LP check: $6.46M
GP co-invest: $718K
LP IRR: 17.7%
LP multiple: 2.14x
GP IRR: 30.3%
Sponsor fees: $564K

Hurdles are measured on the LP's own IRR, so a tier stops paying the moment that rate is reached and the next one takes over.

Outside investor shareⓘ%Asset management feeⓘ%Disposition fee%

Promote Tiers

Up to LP IRR	LP	GP
%		10
%		20
%		30
Residual		40

Each tier is capped where the LP’s IRR reaches its hurdle. The first tier is pari passu, so return of capital and the pref are paid before any promote.

Growth and saleEnd of year 5

Sale at $24,773,245, with $14,080,710 to equity after costs and the loan payoff.

Growth & Exit

5 yrs · 5.75% exit

Rent growth%Expense growthⓘ%Other income growth%Hold periodyrsExit cap rateⓘ%Selling costs%

Year 6 NOI: $1.42M
Gross sale price: $24.8M
Loan payoff: $10.3M
Net to equity: $14.1M
Yield on cost vs exit cap: 149 bps
Reserve returned: $250K

The exit capitalizes the year AFTER the hold ends, because that is the forward NOI a buyer underwrites — not the year you are selling out of.

Returns

Unlevered, levered, and split between the outside investor and the sponsor.

Returns by party

	IRR	Multiple	Avg cash-on-cash	Profit
Unlevered	12.7%	1.73x	6.7%	$13.0M
Levered (deal)	19.2%	2.28x	6.0%	$9.16M
LP, outside investor	17.7%	2.14x	6.0%	$7.35M
GP, sponsor	30.3%	3.52x	6.0%	$1.81M

Break-even occupancy: 71.1%
Yield on cost vs exit cap: 1.49%
Price / unit: $165,000
Rent / price: 1.03%

Capital Stack

Loan sized by loan-to-value — the tightest of the four lender tests.

60%

36%

Layer	Amount	Share	Cost
Senior Debt	$10,725,000	59.9%	6.25%
LP Equity (Outside Investor)	$6,459,525	36.1%	—
GP Equity (Sponsor Co-Invest)	$717,725	4.0%	—
Total capitalization	$17,902,250	100.0%	—

Loan to value: 65.0%
Loan to cost: 59.9%
Year 1 DSCR: 1.63x
Year 1 debt yield: 9.90%

Pro forma

Year by year, from gross potential rent down to cash flow before debt service.

Operating Pro Forma

5-year hold, in whole dollars

	Year 1	Year 2	Year 3	Year 4	Year 5
Gross potential rent	$2,046,600	$2,107,998	$2,171,238	$2,236,375	$2,303,466
Loss to lease	($193,040)	($99,416)	($21,712)	($22,364)	($23,035)
Vacancy	($111,214)	($120,515)	($128,972)	($132,841)	($136,826)
Concessions & bad debt	($37,071)	($40,172)	($42,991)	($44,280)	($45,609)
Other income	$84,600	$87,138	$89,752	$92,445	$95,218
Effective gross income	$1,789,875	$1,935,034	$2,067,316	$2,129,335	$2,193,215
Real Estate Taxes	($264,000)	($269,280)	($274,666)	($280,159)	($285,762)
Insurance	($65,000)	($66,950)	($68,959)	($71,027)	($73,158)
Utilities	($90,000)	($92,700)	($95,481)	($98,345)	($101,296)
Repairs & Maintenance	($70,000)	($72,100)	($74,263)	($76,491)	($78,786)
Payroll	($110,000)	($113,300)	($116,699)	($120,200)	($123,806)
General & Administrative	($25,000)	($25,750)	($26,523)	($27,318)	($28,138)
Marketing & Leasing	($15,000)	($15,450)	($15,914)	($16,391)	($16,883)
Contract Services	($35,000)	($36,050)	($37,132)	($38,245)	($39,393)
Management Fee	($53,696)	($58,051)	($62,019)	($63,880)	($65,796)
Total operating expenses	($727,696)	($749,631)	($771,654)	($792,057)	($813,017)
Net operating income	$1,062,179	$1,185,403	$1,295,662	$1,337,278	$1,380,198
Reserves, capital & leasing	($405,000)	($205,900)	($31,827)	($32,782)	($33,765)
Cash flow before debt service	$657,179	$979,503	$1,263,835	$1,304,496	$1,346,433
Debt service	($650,716)	($665,299)	($792,428)	($792,428)	($792,428)
Cash flow after debt service	$6,463	$314,203	$471,407	$512,068	$554,005
Operating margin	59.3%	61.3%	62.7%	62.8%	62.9%
DSCR	1.63x	1.78x	1.64x	1.69x	1.74x

Sources & Uses

Sources
Senior Debt	$10,725,000
LP Equity (Outside Investor)	$6,459,525
GP Equity (Sponsor Co-Invest)	$717,725
Total sources	$17,902,250
Uses
Purchase price	$16,500,000
Closing costs	$330,000
Capital plan — over the hold	$550,000
Acquisition fee	$165,000
Loan origination fee	$107,250
Operating reserve	$250,000
Total uses	$17,902,250

Exit — Year 5

Forward NOI (year 6)	$1,424,462
Exit cap rate	5.75%
Gross sale price	$24,773,245
Selling costs	($371,599)
Disposition fee	($247,732)
Senior loan payoff	($10,323,204)
Net proceeds to equity	$14,080,710
Price per unit	$247,732

Capital and partners

How the equity splits through the waterfall, and the loan year by year.

Distribution Waterfall

Each tier is capped where the LP's IRR reaches its hurdle. The sponsor's promote is what it earns above its capital share.

Tier	LP	GP	Total	% of proceeds
Return of capital + 8% pref — 90 / 10	$9,168,025	$1,018,669	$10,186,694	62.4%
To 14% LP IRR — 80 / 20	$2,670,674	$667,668	$3,338,342	20.4%
To 20% LP IRR — 70 / 30	$1,968,468	$843,629	$2,812,097	17.2%
Above final hurdle — 60 / 40	$0	$0	$0	0.0%

Partner returns	Invested	Distributed	Profit	IRR	Multiple
LP — outside investor	$6,459,525	$13,807,167	$7,347,642	17.7%	2.14x
GP — sponsor	$717,725	$2,529,967	$1,812,242	30.3%	3.52x
Deal level	$7,177,250	$16,337,134	$9,159,884	19.2%	2.28x
Sponsor fees, outside the promote	—	$564,454	Acquisition, asset management and disposition fees

Cash flow to equity	Close	Yr 1	Yr 2	Yr 3	Yr 4	Yr 5
Total	($7.18M)	$355K	$460K	$440K	$480K	$14.6M
LP	($6.46M)	$319K	$414K	$396K	$432K	$12.2M
GP	($718K)	$35K	$46K	$44K	$48K	$2.36M

Debt schedule

Year	Beginning balance	Interest	Principal	Debt service	Ending balance	DSCR	Debt yield
Year 1	$10,175,000	$650,716	$0	$650,716	$10,550,000	1.63x	9.90%
Year 2	$10,550,000	$665,299	$0	$665,299	$10,725,000	1.78x	11.05%
Year 3	$10,725,000	$666,753	$125,675	$792,428	$10,599,325	1.64x	12.08%
Year 4	$10,599,325	$658,669	$133,759	$792,428	$10,465,566	1.69x	12.62%
Year 5	$10,465,566	$650,066	$142,362	$792,428	$10,323,204	1.74x	13.19%

Sensitivity

Pick any two drivers and read the outcome across both.

Sensitivity

Every cell is a full rerun of the model, not an interpolation.

Output

Pick two drivers — click one already in play to swap the axes

LP IRR across Exit cap and Rent growth
Exit cap ↓ / Rent growth →	2.00%	2.50%	3.00%	3.50%	4.00%
5.25%	18.0%	19.2%	20.3%	21.4%	22.4%
5.50%	16.6%	17.8%	19.0%	20.2%	21.2%
5.75%	15.2%	16.5%	17.7%	18.9%	20.0%
6.00%	14.0%	15.2%	16.4%	17.6%	18.8%
6.25%	12.5%	14.0%	15.2%	16.4%	17.6%

The outlined cell is the current case. To hit a 15% LP IRR you can pay up to $17,464,405 — that is 5.8% against the current price.

Price to clear

The model run backwards: set what has to be true, and read the price — or the seller terms — that gets there.

Min DSCRⓘMin cash-on-cashⓘ%Refi rateⓘ%Seller note couponⓘ%

Pay no more than$14,982,480A

against an ask of $16,500,000 · binds on cash-on-cash

Clearing these targets needs the price down to $14,982,480, which is 9% off the ask.

Or carry a seller note of—

no note is enough at this price

Seller paper cannot help here. At this price the deal returns 5.1% on equity against a 6.0% note, so every dollar carried makes the return worse rather than better. The price has to move.

Both answers size the senior loan at the refi rate above, so they hold at that rate rather than at the one on the deal. The binding target is the one the answer is pressed against — loosen it and the price moves most.

Score and items to confirm

How the deal grades against the benchmarks for its class, and what a committee will ask about.

Deal Score

Clears on Minimum DSCR; watch Average Cash-on-Cash.

87/ 100A

✓Cash flow positive every year$355KEquity is never asked for another dollar after closing.
✓Debt coverage of 1.20x1.63xCoverage holds through the whole hold.
✓Cash-on-cash of 6%6.04%Operations alone earn a return; the sale is upside rather than the whole case.

LP IRR17.70%18.4 / 22
Target 15.00% · Outside investor return after the promote. Class target is 15%.
LP Equity Multiple2.14x10.8 / 12
Target 1.80x · Dollars back per dollar in over a 5-year hold.
Average Cash-on-Cash6.04%8.4 / 12
Target 6.00% · Operating distributions only, excluding the sale.
Minimum DSCR1.63x12.0 / 12
Target 1.25x · Lowest coverage in any year of the hold.
Year 1 Debt Yield9.90%6.3 / 8
Target 9.00% · NOI over loan balance — what the lender recovers if it takes the asset back.
Going-in Cap vs Market0.94%8.9 / 10
Target 0.00% · Market cap for this class is 5.50%. Positive means buying at a discount.
Yield on Cost vs Exit Cap1.49%8.8 / 10
Target 0.75% · The margin created by the business plan. Thin spread means the deal is a bet on the exit.
Break-even Occupancy71.12%7.8 / 8
Target 85.00% · Occupancy needed to cover operating expenses and debt service.
Loss to Lease (rent upside)15.39%5.3 / 6
Target 8.00% · Meaningful gap between in-place and market rent.

Items to confirm

The model raises no flags on these assumptions.

Note Every figure on this page is produced by the model from the assumptions above. It is an underwriting tool, not investment advice or an appraisal, so verify rents, expenses, taxes and debt terms against the actuals before committing capital.