Proforma Advice for Multifamily Equity Investment

[Nicholas Cook]

Hello!

I am working on a pro forma for a new construction project for 55 multifamily units.

Our plan is to bring in an equity partner that will ideally be interested in a long term investment. With that said, we want to be able to demonstrate options in our pitch deck.

My question is are:

1. The first 18 months is going to be construction and lease-up to stabilization. Do I setup year 1 and year 2 to reflect the lack of income/reduced cash flows? This would push the full schedule (12 months) of cash flows to year 3. I assume so, but wanted to confirm.

2. We plan to hold this project long term, but are open to refinancing and return capital in year 5.  Normally I forecast a sale in the pro forma, but I am not sure where to place this. Would year 7 make sense? Given that we don't plan to sell I am not totally clear on how to represent to an investor their return of capital and then future cash flows for an unknown period. 

My goal is to provide a clear NPV and IRR.

Perhaps I am over thinking it. Any input would be greatly appreciated.

Thank you!