Understanding the Proforma

The Cash Flow tab presents your deal's annual financial projections in a structured waterfall format. Each column represents one year of the hold period, and the rows flow from top-line revenue down to bottom-line returns. The primary line items are: Gross Potential Rent (GPR), Vacancy & Credit Loss, Effective Gross Income (EGI), Operating Expenses (OpEx), Net Operating Income (NOI), Debt Service, Before-Tax Cash Flow (BTCF), and Debt Service Coverage Ratio (DSCR). Every value updates in real time as you adjust assumptions elsewhere in the model.

Revenue starts with the Unit Mix you defined, which establishes GPR. From there, the model deducts your vacancy rate and credit loss assumptions to arrive at EGI. Other income sources (parking, laundry, fees) are added if configured. Operating expenses — which you can enter as a total, per-unit, or as a percentage of EGI — are then subtracted to produce NOI. Debt service is calculated from the loan terms in your Capital Stack (loan amount, interest rate, amortization, and IO period) and subtracted from NOI to yield Before-Tax Cash Flow, the actual cash distributed to equity holders each year.

At the bottom of the proforma, Valuation displays the deal's key return metrics: IRR (levered internal rate of return), Equity Multiple (total distributions divided by total equity invested), Yield on Cost (stabilized NOI divided by total project cost), and Cash on Cash return (annual BTCF divided by equity invested). The DSCR row shows the debt service coverage ratio for each year, helping you confirm the property meets lender requirements (typically 1.20x or higher). Together, these metrics give you a complete picture of the deal's risk-adjusted performance across the hold period.