Back of the Envelope Apartment Analysis Template
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Do you need an Excel spreadsheet to quickly vet and qualify a multifamily investment opportunity before diving into the detailed analysis? We offer real estate investors a free one-pager template to help evaluate a project in minutes.
Download our Free Tactica RES™ “Back of the Envelope” Multifamily Analysis Template
A simple, one-page deal analysis spreadsheet that will allow you to qualify a potential real estate project in 5 - 10 minutes. Enter your details below to get access.
General Property Info
You’ll enter the property address, unit count, and rentable square footage.
This data is essential to get price/unit and price/SF at different pricing thresholds to compare to real-world sale comps.
Pricing, Debt & Equity
This section is where you’ll input the pricing guidance and financing terms. You can toggle between LTV and LTC parameters depending on what the capital requirements are for the particular project.
At the bottom, the total equity requirement is highlighted in green.
Apartment Operations
You can make rough estimates for revenue and expense operations in this section. Revenue assumptions are made on a “monthly per unit” basis. A line is dedicated to “rent premium” if the rent comp set indicates the units are underpriced. “Vacancy” is a general loss that should include vacant units, loss-to-lease, and rental concessions. Whatever percentage you enter will be multiplied by all revenue line items.
Operating expenses are made on an “annual per-unit” basis, except for the management fee, a percentage of total revenue. The property tax assumption has a separate section with a more detailed calculation that will flow into this section.
Annual NOI, mortgage payment, and cash flow after debt service are summarized along with the expense and debt service coverage ratios (DSCR).
CAPEX
If the project is ripe for a value-add strategy or is in disrepair, you can formulate your major CAPEX assumptions in this section.
Your financing election of “LTV” or “LTC” determines if this CAPEX is financed or not.
Property Taxes
You must research the current property valuation per the local assessor and the current taxes payable. The template will calculate the applicable tax rate for you. You can then estimate the reassessment percentage post-sale. This assumption determines your property tax liability in the “Operations” section.
Some quick calculations for future taxes and future tax per unit are included if you want to compare your real estate tax estimates with other tax comps.
Return Metrics
Finally, a few proforma yield metrics are summarized in the final section. First, the total cost basis is summarized (Price + CAPEX + Loan Cost).
Return Metrics Include:
Once you enter all prevalent project details, adjusting the pricing assumption makes it easy to see how the return metrics are affected.
Video Tutorial: 40-Unit Case Study
Video Tutorial: How to Build this Multifamily Excel Proforma
Qualified Project: Next Steps
The back-of-the-envelope calculations can effectively disqualify a potential investment before you commit too much bandwidth to the analysis. But what if you plug in some rough estimates and see potential?
There are a few different courses of action you could take.
Ballpark figures and simple calculations are significant, but a more thorough analysis is wise. Three Tactica tools may provide you with a much deeper and more accurate proforma underwriting analysis depending on your investment and your preferences.
Free Proforma Template
Tactica’s Free Multifamily Template allows you to underwrite up to a 10-year investment hold, make a residual assumption, and calculate IRR and equity multiple in addition to the cash-on-cash, cap rate, and yield on cost. While this is still a free template, it is more robust than the one-pager and is an excellent starting step before committing to Tactica’s paid models.
Value-Add Model
Tactica’s Value-Add Model does everything our Free proforma template accomplishes, plus:
Break down your unit mix into original and renovated units.
Come up with a rental premium specific to each floor plan.
Make capital assumptions for each unit type.
More ancillary analysis
While it’s titled “Value-Add” and is ideal for a value-add business plan, it also works excellent for newer turnkey multifamily properties.
Redevelopment Model
For distressed repositioning efforts requiring bridge financing and a refinance once the property is stabilized, the Redevelopment Model is a good choice. It allows investors to take on a much more granular approach to renovations and includes the same partnership distribution models as the Value-Add Model.
Back of the Envelope Analysis Summary
If time is of the essence and you need to qualify or disqualify an apartment investment in real-time quickly, the back-of-the-envelope template should do the trick. The intuitive one-page format will help you formulate a high-level opinion of the investment opportunity.
