Units in, returns out — GPR, NOI, cap rate, DSCR, and cash-on-cash in one quick estimate.
A quick multifamily pro forma — rent roll, expenses, and financing in; GPR, NOI, cap rate, DSCR, and cash-on-cash out. All fields required for a full result.
Operating costs as a share of effective gross income — stabilized apartments commonly run 40–55%.
Income waterfall — rent to cash flow
Debt Service Coverage
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<1.0 won't fund1.0–1.25 tight1.25+ healthy
Enter the rent roll, expenses, and financing to see whether the deal covers its debt.
GPR = units × rent × 12. EGI = GPR − vacancy. NOI = EGI − operating expenses. Cap rate = NOI ÷ price. DSCR = NOI ÷ annual debt service. Cash flow = NOI − debt service. Quick estimate — the full UpsideIQ underwrite runs a 10-year DCF with reserves, exit, and a graded score.
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What a multifamily pro forma does
A pro forma is a one-page projection of how an apartment deal performs in its first stabilized year. It walks income down from gross potential rent to net operating income, then layers in financing to show the returns an investor actually keeps. This calculator runs that whole chain instantly so you can sanity-check a deal before you build a full model.
The income waterfall
Gross Potential Rent (GPR) = units × average monthly rent × 12 — the income if every unit were leased at market all year. Subtract a vacancy allowance to get Effective Gross Income (EGI). Subtract operating expenses (taxes, insurance, management, repairs, utilities, payroll) to get Net Operating Income (NOI). Operating expenses are often expressed as an expense ratio — the share of EGI consumed by costs — which for stabilized multifamily commonly runs 40–55%.
From NOI to returns
NOI ÷ purchase price gives the going-in cap rate. Financing then drives the levered numbers: the loan amount (price × LTV) and the rate and amortization set the annual debt service; NOI ÷ debt service is the DSCR; and (NOI − debt service) ÷ the equity invested is the cash-on-cash return — the first-year yield on the cash you put in. The unlevered NOI ÷ price is your going-in levered yield reference point before debt.
Reading the output
Strong stabilized multifamily typically shows a DSCR comfortably above 1.25x, a cash-on-cash in the mid-single digits or better, and a cap rate consistent with comparable sales in the submarket. If cash-on-cash is negative or DSCR is under 1.0x, the deal does not cover its debt at the price and terms entered — raise NOI, lower the basis, or adjust the financing. This is a quick estimate; a real acquisition needs unit-level rents, a true expense build, reserves, and a multi-year exit. Full institutional underwriting — 10-year DCF, reserves, exit, and a graded deal score — is what UpsideIQ does.
Frequently asked questions
What is a multifamily pro forma?
A pro forma is a forward-looking projection of a property's income, expenses, and returns for a stabilized year (or several years). It walks from gross rent down to NOI and then to levered cash flow, so an investor can judge whether the deal pencils before committing.
How do you calculate NOI for an apartment building?
Start with Gross Potential Rent (units × monthly rent × 12), subtract vacancy to get Effective Gross Income, then subtract all operating expenses (taxes, insurance, management, repairs, utilities, payroll). The result is Net Operating Income — before mortgage payments.
What is a good expense ratio for multifamily?
Stabilized apartment operating expenses commonly run 40–55% of effective gross income, varying with property age, location, tax burden, and whether the owner or tenants pay utilities. Newer, well-located, tenant-metered properties trend toward the low end.
What is cash-on-cash return?
Cash-on-cash is first-year pre-tax cash flow (NOI minus annual debt service) divided by the equity invested. It measures the cash yield on the actual dollars you put into the deal, separate from appreciation or loan paydown.