Curious to know if anyone has a ground-up multifamily development model that they do not mind sharing.
I am currently building one that will include the construction/lease-up schedule, and it would be great to have something to reference.
Thanks!
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Me too.
I do not have a model to share with you but I am more than willing to help guide you through yours. Are you doing a month by month DCF breaking out the project cost along with the lease up then stablization and sale?
how prevalent are month to month DCFs in a real estate model? i have seen models without the present value discount to CFs.
Thanks Inspiredanalyst; the lease-up and construction schedules are month-by-month and then annual cash flow once the asset reaches stabilization on a predetermined stabilization month.
If your trying to build a generic template that you can use on future developments I would track cashflows monthly. It doesnt take much to roll these into annual totals and if you end up having a more complicated JV structure you'll want to view these on a monthly basis.
Typically, you'd use month-to-month calculations and then do an annual roll-up once the pro-forma is stabilized. For a multifamily project, you'd have a 12-18 month construction curve and then a stabilization period based on the absorption. The purpose of month-to-month calculations for a multifamily that you intend to hold as an operated asset is that most good property managers use revenue management software and market surveys to price apartments based on then-current demand and vacancy rates. Because of that, it is helpful to have a granular model that can be adjusted at the micro-level before being rolled into an easier-to-read annual pro-forma.
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