Kevin Michael Thompson 772.341.5795 │ [email protected]│ Full Resume at: http://www.linkedin.com/pub/kevin-thompson/18/565/18/en Sample Underwriting Proforma Template Excerpt Below is the first image excerpted from a number of tabs/sheets in an Excel underwriting template that I developed and typically use for underwriting multi-family assets. What is shown in the following images is what might be forwarded to an investment fund or lender for underwriting and analyses, and some portions of this template might also (and have been) used in a formal Investment Summary. What is shown below highlights aspects of the property location, unit counts/sizes, existing rental income, existing or prospective financing, etc., and the prospective returns for the investment. Institutional Asset MSA: Summary of Purchase Per Unit Cap Rate Fin. Reference Purchase/Offer Price: $90,774 5.70% Mar-14 Asking Price(/Unit): $94,000 5.50% Price (@ Cap Rate): $82,726 6.25% Year Constructed: 2013 Estimated Rehab/Unit $0 Referenced Data: Acquisition Terms: See "Notes:" Manually Fill: Investment Year 1 Year 2 Year 3 Year 5 Year 7 Avg Rent Increase $55 $45 $45 $41 $45 Average Eff. Rent/Unit $900 $948 $993 $1,074 $1,162 CPI Only Eff. Rent $913 $949 $987 $1,068 $1,155 CPI Only Increase $35 $37 $38 $40 $44 Value Add/Repositioning $20 $8 $7 N/A N/A Income/Unit $10,472 $11,045 $11,609 $12,557 $13,581 Expense/unit $5,244 $5,487 $5,719 $6,100 $6,477 NOI/Unit $5,228 $5,558 $5,890 $6,456 $7,104 Market Value/Unit $90,514 $96,510 $102,551 $112,845 $124,626 IRR -6% 12% 17% 18% 19% COC -4% 6% 6% 5% 5% DSC 1.21 1.29 1.37 1.38 1.29 Income CPI 4.00% Expense CPI 3.00% Exit cap 5.50% Refi Int Rate 6.25% Estimated Closing Date: 11/11/14 Class of Asset A Instutional Grade Yes Location Rating A Green Demographics A- Yellow Building Quality A 6 Recent Renovations N/A 6 Barriers to Entry B 6 New Construction C Occupancy Projections A+ Rents A Rent Growth Good Miscellaneous Average Austin, TX Austin Crime Rating Schools Elementary Middle/Junior High High School Other Analyses/Neighborhood Data $1,084,000 $30,500,000 $31,584,000 $27,796,080
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Kevin Michael Thompson 772.341.5795 │ [email protected] │ Full Resume at: http://www.linkedin.com/pub/kevin-thompson/18/565/18/en
Sample Underwriting Proforma Template Excerpt Below is the first image excerpted from a number of tabs/sheets in an Excel underwriting template that I developed and typically use for underwriting multi-family assets. What is shown in the following images is what might be forwarded to an investment fund or lender for underwriting and analyses, and some portions of this template might also (and have been) used in a formal Investment Summary. What is shown below highlights aspects of the property location, unit counts/sizes, existing rental income, existing or prospective financing, etc., and the prospective returns for the investment.
Institutional AssetMSA:
Summary of Purchase
Per Unit Cap Rate Fin. Reference
Purchase/Offer Price: $90,774 5.70% Mar-14
Asking Price(/Unit): $94,000 5.50%
Price (@ Cap Rate): $82,726 6.25%
Year Constructed: 2013
Estimated Rehab/Unit $0 Referenced Data:
Acquisition Terms: See "Notes:" Manually Fill:
Investment
Year 1 Year 2 Year 3 Year 5 Year 7
Avg Rent Increase $55 $45 $45 $41 $45
Average Eff. Rent/Unit $900 $948 $993 $1,074 $1,162
Both the preceding and subsequent image are from the same tab, which provides a good general overview of the asset. What is shown is the asset unit counts/sizes, existing rental income, qualitative data about the asset and seller, and an area to include rudimentary information on assets acquired within the competitive market.
Notes:
Acq Comps: Institutional Asset
Yr Built 2013
Price/Unit $90,774
All In/Unit $95,260
Avg Unit SF 739
In Cap 5.70%
Exit Cap 5.50%
Inc/Unit $10,317
In-Place Rents/Unit Mix
Unit Size # Units Mkt Rent PSF LTL Eff Rent PSF Annual Rent
The unit mix lends itself to young techno-geek tenants (smaller, and A+), resulting in a good tenant profile. Nice A-Class asset, but with small units. This is both a pro and con due to the
demographics and market appeal. Selling Motive: two partners are divesting. Developer's mistakes: Vacant land nearby prepared for development, units are currently being built in the
neighborhood (nearby competitor is 40% leased, but at $1.23/SF. Velocity is +40 units month), and getting the loan product they did at that point in time. The seller is now building 80,000+ SF of
office space. Lender has been approached about supplemental (to bring debt up to 75% AT THE SAME I.R., but NOT confirmed yet). Crime: Green. Schools Avg: "6." Austin is a stronger/more growth-
oriented market than San Antonio or Dallas. Higher increases in rents during the last two years than S.A., but new product is coming on line as the price per unit is making new construction feasible.
High net worth family from Winnipeg is behind the equity, but Ledcor fund is out of Vancover. Westwood Residential was the builder. Park and ride is nearby.
The following two images are from the “Income Analysis” tab where the most significant analysis is displayed.
KEY RATIOS
A
p 0 Mar-14 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7Rent Increase $55 $45 $45 $40 $41 $43 $45
EXPENSES Appraisal 0 Mar-14 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7Administrative $61,864 $220 /unit $73,920 $76,138 $78,422 $80,774 $83,198 $85,694 $88,264
RETURN OF CAPITAL Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7Equity Balance Equity Override: $8,797,864 $9,385,943 $9,922,032 $8,683,856 $9,080,261 $6,306,174 $6,536,260
Cash Flow for Distribution Rehab Costs: $291,707 $402,505 $514,147 $471,980 $569,179 $400,531 $511,806
Capital Event Distribution $0 $0 $1,716,233 $0 $3,112,935 $0 $9,774,522
Cumulative Distribution $291,707 $694,212 $2,924,592 $3,396,572 $7,078,686 $7,479,217 $24,301,805
REFINANCE SCENARIO Oct-13 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7Value at Cap Rate $31,586,455 5.50% $30,412,731 $32,427,240 $34,457,104 $36,148,734 $37,915,999 $39,851,055 $41,874,233
Per Unit Exit Cap Override 0.00% $90,514 $96,510 $102,551 $107,586 $112,845 $118,604 $124,626
Maximum Financing 68% $20,680,657 $22,050,523 $23,430,831 $24,581,139 $25,782,879 $27,098,717 $28,474,478
Available For Distribution If negative, no distrbution/supplemental: $1,716,233 $0 $3,112,935 $0 $0
SALES SCENARIO Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7Value at Cap Rate 5.50% $30,412,731 $32,427,240 $34,457,104 $36,148,734 $37,915,999 $39,851,055 $41,874,233
Per Unit $90,514 $96,510 $102,551 $107,586 $112,845 $118,604 $124,626
Cost of Sale 2.00% ($608,255) ($648,545) ($689,142) ($722,975) ($758,320) ($797,021) ($837,485)
Equity Returned ($8,797,864) ($9,385,943) ($9,922,032) ($8,683,856) ($9,080,261) ($6,306,174) ($6,536,260)
Return of Escrows and Reserves $591,230 $591,230 $591,230 $591,230 $591,230 $591,230 $591,230
The following image is the rental income projections for the first three years. As this underwriting is designed for use in underwriting “value-add” properties, displaying the income during the initial three years is designed to articulate the impact of increased rent projections, as well as projected changes in vacancy and loss to lease during the acquisition and rehabilitation periods.
Institutional AssetAustin, TX
Assumptions:
Units 336
Current Occupancy 4.2%
Lease Turnover/Month 28
Loss to Lease/Unit $112
Avg Rent Increases
Year 1 $55 B15 From Current Rent Roll
Year 2 $45 C15 from Beginning Monthly Rent OR Current Rent Roll
Year 3 $45 100% Monthly Income Reference "Selection Factor"
YEAR ONE Jan-14 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total
This image is the real estate/property tax projections for the asset, and all subsequent images (of additional tabs/sheets in the Excel workbook) are for internal use of the company/organization.
Assessed/Inc in Value 85% 90% 5.0% 3.0% 3.0%
Purchase Price Inc in non Adv 1.0% 0.5% 0.5% 0.5% 0.5%
$30,500,000 Inc in Millage 1.0% 0.5% 0.5% 0.5% 0.5%
2013 2014 2015 2016 2017 2018
School Assess $24,070,000 $25,925,000 $27,450,000 $28,822,500 $29,687,175 $30,577,790
Non School Assess $0 $27,450,000 $28,822,500 $29,687,175 $30,577,790
School Millage 30.1270 30.4283 30.5804 30.7333 30.8870 31.0414
The rehabilitation of a “Value-Add” asset includes all construction costs and associated fees for repairs and upgrades in an integrated “Rehab” tab/worksheet associated with each asset. With a value add asset, this displayed in the following three images.
Units 336Bedrooms 420
Bathrooms 420
IMMEDIATE REPAIRS Budget
months 10,000$
months
months
months
Total Immediate Repairs 10,000$
AMENITY UPGRADES Budget
Site Signage 30,000$
Landscape and Tree Trim 75,000$
Irrigation 20,000$
Security Cameras 10,000$
Handi Trac 15,000$
Trash Compactor 52,000$
Club House/ Leasing center 65,000$
Pergula's # of 4,000$
Coffee Shop 2,500$
Fitness Center 7,500$
Fitness equipment 15,000$
Pools / # of
Sports court / type 8,000$
Laundry Facilities # of
Golf Cart
Kids center 5,000$
Dog park 7,500$
BBQ Area 4,000$
Wi-Fi 5,000$
Office Equipment/ Computers 5,000$
Office Furniture 10,000$
Club House Furniture 25,000$
Model Furniture # of 10,000$
Pool Furniture # 0f 12,500$
Total Amenities Costs 388,000$
Time to Complete Repairs
Rehab. Budget Section One
EXTERIOR # of Units Cost per Unit BudgetRoofs Repairs / Replace
Additional Sheets from Sample Underwriting Template The following section contains two images from two of the tabs/sheets excerpted another Excel underwriting template. This data would NOT typically be seen by an investor. The first image is excerpted from the “Financing” tab/sheet of an underwriting Excel workbook. Once the broker provided data is entered, all aspects of the financing structure and holding period can be controlled on this one tab, while providing verification of how the potential return is impacted by these changes. This area reflects and manages all cash flow portions of the file via the use of single cell controls interacting with automated/reactive formulas in the other portions of file. This section provides confirmation of changes made to the structure of investment and financing. These changes can then be referenced in a matrix to show an array of options. A record of the impact of these debt options can then can then be retained on the Debt Comparison Matrix for future reference.
Original Loan Amount $19,000,000 22,875,000$ 19,000,000$ $4,200,000 $23,765,868
Max. Supplemental N/A N/A N/A 72% N/A
Origination Date 10/15/2013 11/15/14 10/15/13 11/15/14 7/15/23
Loan Term 10 7 10 9 7
Interest Rate 4.32% 4.25% 4.32% 4.32% 5.32%
IO Months 0 36 0 0 0
Amortization 360 360 360 360 360
Remaining IO Months 0 36 0 0 0
IO End Date 10/15/13 11/14/17 10/15/13 10/15/13 Jul-23
Maturity date Oct-23 Nov-21 Oct-23 Jul-23 Jul-30
Constant 5.95% 5.90% 5.95% 5.95% 6.68%
DSC 1.61 1.35 1.61 1.32 1.60
Annual Debt Service $1,130,986 $1,350,375 $1,130,986 $250,007 $1,587,220
ACQUISITION DEBT MATRIX LEGENDData to Populate Insert Data Disposition Date November-21Do NOT Populate Auto-Calc or N/A NOI Value @ DISPO. $41,705,634"Key" Cell "$0" or Existing Debt Balance @ DISPO. $24,725,965
Additional tabs/sheets within this template that are not provided are a Sources and Uses tab/sheet, and three separate tabs/sheets that apply to First Mortgage Financing, Second/Supplemental Mortgages (including strategic “Cash-Out” refinancing), as well as what is required for portfolio underwriting.