Start with defensible assumptions
A proforma is only as credible as its inputs. Lenders will check every rent, expense and vacancy assumption against market comps, so document your sources.
Revenue side
Show unit mix, in-place or projected rents per unit type, other income (parking, storage, laundry) and a realistic vacancy and credit loss assumption.
- Rent comps from at least three comparable properties
- Lease-up absorption schedule (units per month)
- Vacancy factor appropriate to the submarket
Expense side
Underestimating expenses is the fastest way to lose credibility. Include property taxes at the post-development assessed value, not the current one, and budget realistic management, insurance, and reserves.
NOI and debt yield
Once revenue and expenses are set, stabilized NOI drives your debt yield and DSCR — the two numbers lenders lean on most to size permanent debt.
Sensitivity matters
Show a base case and a conservative case (higher vacancy, slower lease-up, higher rate). Lenders trust sponsors who stress-test their own numbers before being asked to.