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Back-of-the-napkin commercial real estate underwriting, in seconds.
5 Second Model · back-of-the-napkin underwriting
Multifamily Operations
Unit by unit, line by line. Where the rent roll actually ends up after turnover.
This is a full operating statement for an apartment property, built unit type by unit type. It runs gross potential rent through loss to lease, vacancy, turnover downtime and bad debt to effective gross income, then ten expense lines to NOI, with every figure shown as dollars and as a share of income. Turnover gets its own section because it is the line most pro formas understate: it is not just paint and carpet, it is the days the unit sits empty and the locator fee, every single time.
Net operating income / Cap rate on price
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Sources and uses
Deal metrics
Yield by year
Return on total cost as the deal stabilizes, against the cap rate you exit at
The rent roll
Income statement
Operating expenses per unit per year
Turnover, and what it really costs
| Units turning per year | -- |
| Cost per turn | -- |
| Days vacant between tenants | -- |
| Rent lost to turnover downtime | -- |
| Leasing commission or locator fees | -- |
| All-in annual cost of turnover | -- |
| Per unit in the portfolio | -- |
Per unit and per foot
| Price per unit | -- |
| Price per square foot | -- |
| Average rent per unit | -- |
| Rent per square foot | -- |
| Operating expenses per unit | -- |
| Operating expense ratio | -- |
| Break-even occupancy | -- |
| Value at your exit cap, on today's NOI | -- |
| Your price versus that | -- |
Debt and returns
| Loan proceeds | -- |
| Loan fee | -- |
| Equity required | -- |
| Annual debt service | -- |
| DSCR | -- |
| Debt yield | -- |
| Year-one cash-on-cash | -- |
| Exit value | -- |
| Levered IRR / equity multiple | -- |
| Net present value | -- |
Cash flow by year, including the sale
Operating proforma by year
Income and expenses grown at your assumptions, through to cash flow
Debt service coverage by year
Amortization schedule
Return sensitivity
Levered IRR across average rent and exit cap. Your case is outlined.
Scenario analysis
Each column is the whole model re-run, not an adjustment to the base case.
What moves the return most
Points of IRR between the low and high case for each driver, ranked
Where this deal breaks
Solved against your own discount rate. Everything else held at your assumptions.
Common questions
- How much does tenant turnover actually cost?
- More than the make-ready invoice. On a 24-unit property at 50% annual turnover, the downtime, leasing fees and make-ready together often run 4-6% of gross rent. Cutting turnover ten points is usually worth more than raising rents twenty dollars.
- What is a normal multifamily expense ratio?
- Typically 35-50% of effective gross income, higher for older properties, owner-paid utilities or heavy payroll. If your pro forma comes in far below that, something is missing — usually capital reserves.
- What is a millage rate?
- The way most assessors quote property tax: one mill is $1 per $1,000 of assessed value, so 12.5 mills is 1.25%. Assessed value is often well below what you paid, and many jurisdictions reassess on sale.