Multifamily underwriting software

What the software does

• Underwrite runs that pass in one model.
• You enter the units, the rent, the vacancy, the operating costs, and the loan.
• The engine returns year 1 NOI, the going-in cap rate, project IRR, the equity multiple, minimum DSCR, and a verdict of PURSUE or PASS.

• The return is computed by tested code.
• A language model can read an offering memorandum into the inputs.
• It does not compute the return.
• You can open any assumption and watch the plate move.

What a multifamily model has to hold

• The useful first pass is short.
• Gross potential rent is units times monthly rent times 12.
• Vacancy comes off.
• Other income goes on.
• Operating expenses come off.
• That is NOI.
• Debt service is not an operating expense, so it is not inside NOI.

One average rent is a simplification. A real community has studios and larger homes, and the mix can shift. This model keeps a single average, on purpose, so the first pass stays checkable. The limit is written on the multifamily methodology page.

Worked example

• Lakeshore Garden Apartments in Cleveland, OH is the gallery's multifamily case.
• It is 48 units at $2,200.00 a month, vacancy 5.00%, other income $60,000.00 in year 1, priced at $16,000,000.
• There is no retail income.
• The loan is 65% of price at 6.25%, and the hold is 7 years.

Every figure below is that case run through the engine. Vacancy and operating expenses print in parentheses, which is the engine's sign for a reduction.

• The verdict is PASS.
• Project IRR is 12.14%.
• Minimum DSCR is 1.21x.
• PURSUE needs the IRR at or above the hurdle and minimum DSCR at or above 1.00x.
• This case does not clear both.