Pro Forma Analysis Checklist

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Assumptions

1 of 10

Verify and document all key assumptions driving the pro forma.

Initial Rent per Unit (SF)

Annual Rent Growth Rate (%)

Occupancy Rate (%)

Vacancy Rate (%)

Lease Expiration Dates (Representative Sample)

Explanation of Market Rent Comparables Used

Discount Rate (%)

Terminal Cap Rate (%)

Revenue Projections

2 of 10

Detailed assessment of income sources and projections.

Gross Potential Rent (GPR)

Vacancy Rate (%)

Effective Rent per Unit

Number of Units

Other Income (e.g., parking, laundry)

Rent Growth Rate (Annual)

Explanation of Rent Growth Assumptions

Lease Renewal Percentage

Operating Expenses

3 of 10

Scrutinize all recurring and non-recurring operating expenses.

Property Taxes (Annual)

Insurance (Annual)

Utilities (Annual - Water/Sewer/Trash)

Property Management Fees (%)

Repairs & Maintenance (Annual)

Landscaping (Annual)

Vacancy Rate (%)

Notes/Assumptions regarding Operating Expense Estimates

Capital Expenditures (CAPEX)

4 of 10

Review planned capital improvements and related costs.

Estimated Roof Replacement Cost

Estimated HVAC System Upgrade Cost

Estimated Parking Lot Resurfacing Cost

Estimated Interior Renovation Cost (per unit)

Scheduled Roof Replacement Date

Estimated Cost of Exterior Painting

Description of any other planned CAPEX items.

Supporting Quotes for Major CAPEX Items

Financing

5 of 10

Analyze loan terms, interest rates, and debt service coverage.

Loan Amount

Interest Rate (%)

Loan Term (Years)

Loan Origination Date

Debt Service Reserve (Months)

Loan Fees (%)

Loan Type

Description of Financing Terms

Sensitivity Analysis

6 of 10

Evaluate the impact of changes in key assumptions on the pro forma.

Occupancy Rate Decrease Scenario (%)

Rent Decrease Scenario (%)

Expense Increase Scenario (%)

Interest Rate Increase Scenario (Points)

Capitalization Rate (Cap Rate) Change (%)

Briefly explain the rationale for the selected scenarios.

Which scenario is deemed most likely to occur?

Impact on IRR with most likely scenario (%)

Exit Strategy & Valuation

7 of 10

Assess the assumptions and calculations used for determining the property's future value.

Exit Strategy

Projected Sale Year

Projected Capitalization Rate (Year 1)

Capitalization Rate Growth Rate (Annual)

Projected Sale Price (Based on Year 1 Cap Rate)

Justification for Exit Cap Rate

Comparable Sales Data

Valuation Method

Supporting Documentation

8 of 10

Ensure all assumptions are supported by credible data and sources.

Comparable Sales Data (Comps)

Market Rent Survey Data

Source and Explanation of Vacancy Rate Assumption

Lease Expiration Schedule (Years Remaining)

Property Tax Assessment Documentation

Environmental Reports (if applicable)

Explanation of Capital Expenditure Estimates

Key Performance Indicators (KPIs)

9 of 10

Verify calculations and accuracy of all KPIs (e.g., IRR, ROI, Cash Flow).

Net Operating Income (NOI)

Capitalization Rate (Cap Rate)

Internal Rate of Return (IRR)

Return on Investment (ROI)

Cash Flow (Annual)

Debt Service Coverage Ratio (DSCR)

Loan-to-Value Ratio (LTV)

Break-Even Occupancy Rate (%)

Notes on KPI Calculations & Assumptions

Legal and Regulatory Compliance

10 of 10

Confirm adherence to relevant zoning, environmental, and other legal requirements.

Zoning Verification

Environmental Assessment Completed?

Summary of Environmental Assessment Findings (if applicable)

ADA Compliance Assessment

Copy of Relevant Permits (e.g., Building, Occupancy)

Description of any outstanding legal issues or encumbrances

Date of Last Zoning Review

Rent Control Status

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