Guide · Hold it
Multifamily underwriting in minutes
A 5+ unit property is valued on its income, so the underwriting is about whether that income is real and whether it carries the debt. The app sizes the loan three ways (loan to value, coverage and debt yield), tells you which one binds, and checks the expense load against what a lender expects to see.
Size the loan three ways
A lender lends the smallest of three numbers: a share of value, the loan the income can cover at 1.25x, and the loan that gives a 9% debt yield. The binding one is shown beside the gap, with the price or equity that closes it.
Expenses a lender believes
An operating expense figure that is too low per unit is the first thing an underwriter questions. The app flags expenses below a per-unit floor for the class, and the full model lets you itemise payroll, contract services, utilities and the rest.
Break-even occupancy
The share of units that must be paid for the property to cover expenses and debt. Under 90% leaves room for a bad year; the stress test shows what a vacancy spike, a rate rise or an expense jump does to coverage.
The exit
Hold period, rent and expense growth and an exit cap rate drive the year-by-year proforma, the IRR and the equity multiple. Change any of them and every number recalculates, in the app and in the Excel model.
Worked example: 24-unit apartment
Value-add multifamily: multifamily (5+), $2,350,000 purchase, $240,000 rehab, $3,250,000 after repair, $1,325 rent per unit. Verdict: Work it, 91/100. It pencils at $2,107,200, $242,800 under the $2,350,000 ask.
| Test | Default bar | Kind | This deal | Result |
|---|---|---|---|---|
| Debt service coverage | 1.25 minimum | Hard gate | 1.49 | Clears |
| Monthly cash flow per unit | $200 minimum | Hard gate | $215 | Clears |
| Debt yield | 8.5% minimum | Hard gate | 11.42% | Clears |
| Cash-on-cash return | 8% minimum | Target | 6.1% | Short |
| Loan to value, all debt | 75% or below | Target | 70.0% | Clears |
| Equity created by the rehab | 15% minimum | Target | 20.3% | Clears |
| Break-even occupancy | 90% or below | Target | 76.8% | Clears |
| Operating expenses per unit, annual | $4,000 minimum | Target | $6,959 | Clears |
Illustrative numbers, screened with the default experienced-investor targets. Open the same deal in the app from the samples on the first screen.