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Underwriting models are like snowflakes. Meaning no two are exactly the same.

Here are 3 things every multifamily underwriting model should have:

Monthly Proforma

Every underwriting model should have a monthly proforma. Especially multifamily models! The annual proforma will then be a summary of the monthly.

Benefits of a monthly proforma:

• See operations on a monthly basis

• Make granular adjustments

• Forecast unit renovations on a monthly basis

Year-by-Year Growth & Vacancy Assumptions

As shown in the picture, this allows you to control economic loss assumptions for individual line items.

Similarly, having individual growth rates for rent, payroll, taxes, etc. is much needed today. For example, taxes and insurance are heavily increasing each in year in large metros. Many underwriters will need to grow taxes higher than other operating expenses.

Dedicated Output Page

Having a dedicated output page is helpful when you are sharing the model with other partners and investors. Instead of mindlessly searching throughout the model, users can come to one worksheet to view assumptions, timelines, and returns.

These outputs are prepopulated and are a result of assumptions the underwriter made on different tabs. All in one place.

• Rent Regulation Policy in the United States

• Apartment List Renter Migration Report: 2024

• How to Ride the Apartment Supply Wave

• Multifamily Housing Trends To Watch In 2024

• Survey of Apartment Conditions

• Delinquency Rates Increased in Fourth-Quarter 2023

• Inflating Returns with Subscription Lines of Credit

• 3 Reasons CRE Activity Should Revive

📈 Chart of The Week

Dallas Overtakes New York in Job Gains

According to the latest data release from the Bureau of Labor Statistics (BLS), the Dallas-Plano-Irving metro division produced more jobs in the year-ending November than the New York-White Plains metro division (103,500 jobs versus 90,300 jobs).

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• Multifamily Underwriting Models

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