Causeway Multifamily
Causeway Multifamily Small-balance underwriting
Overview

120 months of a deal, each one calculated.

Rent roll, vacancy, the mortgage, the refinance, the sale and the split with investors. You answer questions in plain English; every figure below moves as you type.

Open the model What it calculates
Calculation

What the model actually runs

Rents escalate on their anniversary. Leases roll and reset toward market. The loan amortises. The refinance is sized against trailing twelve-month income, and the sale is struck at a cap rate that drifts each year.

Rent rollMARKET vs WHAT THEY PAY leases roll, the gap closes Gross potential rentPLUS THE RENOVATION LIFT less vacancy and concessions Rent collectedPLUS PARKING, LAUNDRY, FEES less what it costs to run Net operating incomeWHAT THE BUILDING EARNS less the mortgage,resized when you refinance Cash flowWHAT LANDS IN THE ACCOUNT plus the sale, at a cap ratethat drifts each year ProfitAFTER TAX AND SELLING COSTS split through the waterfall Your return, and theirs
Every arrow is a calculation performed monthly, not an annual approximation. The renovation lift lands the month the work finishes and compounds from there.
Input
Questions, not cells. "What are you paying for the property?" "How much of that is the bank lending?" Each one has a box after it and a line underneath saying what the number means and where people usually land.
Response
Return, multiple, cash to close and year-one cash flow stay pinned to the top of the screen. Change the loan amount and all four move before you finish typing.
Evidence
Four tables: the year-by-year cash flow, what you clear selling in each of the ten years, where every dollar at closing came from and went, and how the loan behaves over time.
Split
Switch the waterfall on and cash runs through return of capital, a preferred return, your catch-up and the promote. Investor and sponsor returns are reported separately.
Storage
Save a deal by name and open it from any device you are signed in on. Nobody else can read what you enter.
Readings

Three things this deal does that a summary hides

All three come from the sample loaded in the model right now. None of them are visible from an annual roll-up.

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Caution · year-one coverage

The debt costs more than the building earns

A 6.95% going-in cap rate against debt at 6.85% is negative leverage. Year one runs at roughly breakeven, and no lender writes that loan at a 1.25× coverage test. The model says so in month one instead of year three.

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Caution · month 57

The refinance takes money rather than returning it

89% loan-to-cost going in, a 72% loan-to-value ceiling coming out: the new loan is smaller than the balance it repays. With investors in the deal that is a capital call four and a half years in, larger than their original cheque.

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Rent below market

The upside is already in the building

Sitting tenants paying under market are the cheapest upside in a small property, but only if the gap closes. The model burns it off at the pace leases actually roll, rather than holding it open for ten years or assuming it disappears at closing.

Caution · limits of this model
Federal rates onlyDepreciation recapture and capital gains are charged at the rates you set. State income tax, the 3.8% net investment income tax and a 1031 exchange are not modelled.
Two variables at a timeThe sensitivity grid moves the exit cap rate against rent growth. Vacancy, operating costs and the refinance stay where you set them.
Deals save in this browserEverything you enter stays on the device you typed it on. Save or load hands you a block of text you can carry between machines. Syncing would need accounts behind the site.
Not adviceEvery figure follows from assumptions you typed. Small changes to growth, vacancy or the exit cap rate move the answer a long way. Have it checked by people who owe you a duty of care.

Put a real deal through it.

The sample is loaded and every field is editable. Replace the rent roll with yours and you have an answer in about five minutes.

Open the model
Project
Causeway Multifamily
Sheet
Underwriting model
Scale
120 months
Source
Pro forma workbook, rebuilt
Corrections
10 from the original
Domain
causewaymultifamily.com
Deal
Small-balance multifamily · acquisition model

The deal, assumption by assumption.

Answer the questions on the left. Every number on the right recalculates as you type: a full monthly model running rent roll, vacancy, debt, refinance and sale across ten years.

The shape of the deal

Income against what reaches your pocket
Net operating income is what the building earns. Cash flow is what's left after the mortgage.
Net operating income Cash flow after debt
What you'd earn, by the year you sell
Annualised return on your cash. Early years can be blank — selling that soon doesn't repay what you put in.

The detail

What this changes from the original spreadsheet

This is a model, not advice. Every figure here follows from assumptions you entered, and small changes to rent growth, vacancy or the exit cap rate move the answer a lot. It isn't investment, tax or legal advice — have the numbers checked by people who owe you a duty of care before you wire anything.

Save or load a deal

Copy this text somewhere safe to keep a deal. Paste a saved one over it and press Load to bring it back.