MODEL DESIGN
How to Build a Multifamily Value-Add Pro Forma Model
Overview
ARTICLE IN PROGRESS
We're writing a deep engineering essay on AQ-131. How we built it, the design choices behind it, and how to use it. The model itself is live and available today.
AQ-131 is where most multifamily underwriting actually lives. A 10-year monthly cash flow with phased renovation, a toggle between agency and bridge debt, and a stabilized exit off trailing NOI. It is the institutional value-add pro forma and the most-used model in the collection.
Planned Sections
When the full piece is published, it will cover:
- Value-add is where most multifamily underwriting lives. And where most templates break.
- Design choice: 10-year monthly cash flow vs annual.
- Design choice: phased renovation budget with unit turnover modeling.
- Design choice: agency or bridge debt as a toggle.
- Design choice: stabilized exit valuation off trailing NOI.
- When you graduate to the opportunistic model (AQ-141).
- How to use the model for IC-ready value-add underwriting.
For an example of the engineering-essay format this article will follow, see how we engineered AQ-141, the Multifamily Opportunistic Pro Forma Model.
About the Model
AQ-131 is an Institutional-tier multifamily value-add pro forma. 10-year monthly cash flows, phased renovation modeling, agency or bridge debt, stabilized exit off trailing NOI. Built for REPE shops and brokers underwriting value-add multifamily acquisitions for committee.