Multifamily Property Acquisition - California
Pro forma adjustments for the acquisition of a stabilized multifamily asset in California. Included hold period and operating expense adjustments.
Client
Fund
Time Spanned
1 Day
About Project
Project Overview
A client approached Mayer Property Group with an existing underwriting model for the acquisition of a stabilized multifamily asset. The original model had been built with preliminary operating assumptions and an outdated hold period that no longer aligned with their revised investment thesis. The property featured a mix of one- and two-bedroom units.
Objective
The goal was to improve the accuracy of the model by updating select underwriting assumptions and providing a clean, refined version for internal decision-making and external review.
Scope of Work
Our engagement focused on two primary adjustments:
1. Hold Period Revision
The original hold assumption was reevaluated based on the client's updated business plan. We adjusted cash flow schedules, exit timing, and debt payoff calculations to reflect a new five-year timeline.
2. Operating Expense Refinement
We reviewed each expense category and updated projections to reflect current market benchmarks and comparable asset performance. This included utilities, property management, repairs and maintenance, and insurance.
Outcome
The updated model gave the client a more accurate view of projected performance under the new hold strategy and helped them better assess both leveraged and unleveraged returns. The refinements supported internal investment committee review and improved alignment between the pro forma and current market trends.
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