Sep 22, 2025
Hey everybody, underwriting your multifamily deal and getting to the proforma shouldn’t really be a five-minute exercise. In today’s video, I’m going to show you precisely how to do that. My name is Anton Zjac. I’m with Intel CRA and we’ve underwritten thousands of deals ourselves. Basically, here we’re trying to drill down on what are the most important points and how you can be extremely efficient with this process so you never spend hours underwriting a deal that’s obviously not going to work — or even worse, spend hours underwriting a deal that you find very profitable and once you submit an offer, you find out that there were other offers submitted before yours and you never get to sit behind the table and have a chance of acquiring this great property.
We’re going to need the basic deal data such as the unit mix, obviously the address of the property, and some other information about the property like year built. Then we’re going to need our in-place income and expense figures — basically the current rents at the property as well as the current vacancy and the current expenses at the property including taxes. The other piece of data we need is if we have some sort of loan quote or proposed financing for the deal — what those terms look like, such as interest rate, LTV, loan fees, etc.
Before the last piece of data, we need some market-level data such as what the proforma income or rents are going to be, and for that we’re going to need rent comparables. We also want to make sure we know what the proforma expenses are going to be at this property and, of course, some holistic market-level data such as the proforma vacancy, rent growth rate, appreciation, and, in order to price the deal ultimately, we need to look at sales comparables — similar properties that were sold in that market with similar characteristics to our deal. Finally, we need our target returns or basically what we would consider a good deal.
Let’s get right into it. Let’s actually use our proprietary tool that you can use for free — Intel CRA — which is designed to help you build a multifamily proforma in a few simple steps and under five minutes every time. Welcome back. As I promised, we’re going to build a multifamily proforma here together in less than five minutes. We’re going to use the Intel CR platform as it is the perfect tool designed to do precisely that.
We’re going to start with our basic deal data such as the address. We might know the year built and some other property characteristics. After we have the property address we go to advanced analysis, and now we’re prompted to upload some of the documents because, as discussed, some of the basic data we need would be our current rental income (in-place income at the property), our current expenses at the property, and then we’ll look at the proforma values for the income and the proforma expenses, and then we’ll be close to finishing our proforma.
Usually, the data about the unit mix at the property and about the current or in-place rents are packaged in a document called the rent roll. We do have the ability to upload the entire rent roll, but if we don’t have a document like that we can also manually type in the data. For the current expenses, we might upload a document. Usually current expenses are packaged in a document called the T12 or trailing 12-month statement or profit and loss statement. We have the option to upload such a document in the expenses section — this speeds up the process.
We already have the basic deal data such as 10 units — six one-bedroom and four two-bedroom — property class and some other information. Now we look at our income. From the uploaded rental document we see all our current rents and we see our entire unit mix here.
In order to look at the proforma or potential rental income at this property, we want to look at the rent comps. In the platform, we can just click a button and look at what similar properties in the neighborhood have in terms of rent. This will help us determine the proforma rental income or the proforma rental revenue. Of course, having a look at these rent comps and picking the best ones that represent a very similar property to our subject property, we’re already looking at the proforma rent for these units — for the one-bedroom and for the two-bedroom units. Together, this gives us our potential or proforma rent at the property.
We also want to look at some market-level data such as how we see the proforma rent growing in the years to come. We have some assumptions around the proforma rent growth rate and also around the vacancy. For this we would have to do thorough market research to see what the vacancy has been and forecast what the vacancy or proforma vacancy will be in years to come. We have those assumptions and we’re pulling live market data to help speed up the process and work with accurate numbers.
Now for the expenses we uploaded — all our expenses including taxes, management, maintenance, utilities — have been pulled here. These are our current values for the expenses, and then for the proforma values we can usually use the same as current or, in some cases, adjust them. For example, taxes may change depending on the assessed property value after purchase. There’s also an option to forecast expense growth, which usually follows inflation.
Now let’s look at another market-level data point — the sales comps — to help determine the pricing for this deal. The platform automatically does that and gives us a nice sales comp set. Based on that, we’re already looking at a price range for this deal. This should be part of the proforma or underwriting — figuring out how much the deal should cost. We’ve priced the deal in under three minutes.
Some of the other data we might want to use for building a proforma is whether we have a loan quote or some sort of proposed financing for the deal. We can do that right here by enabling the acquisition financing and, of course, entering the interest rate, amortization, loan term, loan origination fees, interest-only periods, and things like that. We also look at the LTV or, if not provided, use the debt coverage ratio to calculate the maximum LTV.
Now that we have the financing, we have everything — it’s time to create the proforma. Again, we started with basic deal data, then we had the income (current and proforma using rent comps), then expenses (current versus proforma), then pricing (using sales comps — similar properties in the market sold recently), and now we’re looking at the proforma result already. We have our financials all reported here — a detailed cash flow. For the proforma we only need the cash flow for year one, which we have here.
The last piece of the proforma puzzle is to know what our investment goals are or what the minimal returns are for us. It could be a cap rate — a proforma cap rate we’re looking for. All the return metrics are here up top — it could be our cash-on-cash return depending on how long we want to hold this project. Are we thinking of holding this property for five years and then selling it, or 10 years, or maybe refinancing or doing a 1031 exchange a few years down the road into a bigger property? All of that is part of our strategy. Given the minimal return metrics we have in mind, we can see whether this deal is actually passing that filter and whether it’s something we want to spend more time on.
Building the proforma in under five minutes is what we’ve done here. In fact, we’ve done much more because we have the detailed cash flow for this deal 10 years out and some other important information. We go beyond the basic return metrics such as the cap rate or the cash-on-cash return. For those looking for IRR, internal rate of return, equity multiples, return on investment, or return on equity, we’ve calculated those as well.