How Underwrite handles Multifamily.
Multifamily is the most homogeneous CRE asset class, and consequently the easiest for a model to handle well. The engine treats it as a per-unit business: residential units x monthly rent x 12 = GPR, minus vacancy and operating expenses to NOI. Operating Snapshot surfaces Units, Avg Rent / Unit / Mo, Vacancy, Cost / Unit, and Y1 EGI / Unit. The Insurance / Tax Spike stress scenario captures the post-2023 escalation many MF markets are seeing.
What the engine surfaces natively
On any Multifamilydeal, the in-tool Operating Snapshot replaces generic schema labels with the asset class's native vocabulary:
- Units. Unit count. The atomic input for MF underwriting.
- Avg Rent / Unit / Mo. In-place average monthly rent. The engine uses a single number; real MF underwriting splits by unit type (studio / 1BR / 2BR / 3BR) with mix-shift assumptions.
- Vacancy. Stabilized economic vacancy. Institutional MF runs 5-8% typically.
- Cost / Unit. Purchase price divided by unit count. Workforce MF often $80-150K/unit; coastal Class A $300-600K/unit.
- Y1 EGI / Unit. Effective gross income per unit per year. Useful cross-deal comp.
Property-type-aware validation bands
Validation guards in lib/engine/validation.ts use these tighter bands for Multifamily instead of the generic defaults:
- Property management % of EGI: 2-6%. Standard institutional band. Self-managed deals run thinner but lose institutional-buyer appeal.
Asset-class stress scenarios
The ScenarioBar surfaces these stress overlays when Multifamily is the current property type:
- Insurance / Tax Spike. Expense growth +200bps, property mgmt +50bps. Models the insurance and property-tax escalation seen across many MF markets post-2023.
- All four generic stress scenarios (Base, Recession, Rate Spike, Aggressive) are also available on Multifamily deals.
Example deal: Lakeshore Garden Apartments
The Multifamily pre-built example computes to the headline values below. Click into the tool to edit any input and watch the engine recompute live, or open the IC memo to see the full deterministic output.
Current model boundaries for this asset class
These are the Multifamily-specific institutional features Underwrite deliberately routes to analyst review today. The full list across all asset classes is at /methodology/beyond-phase-1.
- Unit mix detail is collapsed to a single average rent. Real underwriting splits by unit type with mix-shift assumptions across the hold.
- LIHTC and affordable structures (income restrictions, tax-credit pricing, compliance period economics, recapture risk) are not modeled.
- Other-income detail (parking, laundry, pet fees, application fees, RUBS, trash) is a single line.
- Opportunity Zone / 1031 / IRA overlays are not modeled.