What is a Proforma and how is it used?

A Proforma is used to help to highlight the assumptions of the property.

The proforma is provided by the issuer as their projection with the investment. 

A Proforma is a financial projection highlighting sources and uses of funds, equity/debt breakdown, and partner underwriting.

• Sources & Uses Table: Breakdown of funds allocated for the project.
• Equity / Debt breakdown: Detailed overview of equity and debt financing for the investment.
• Underwriting by partner on the project in excel format: Partner's financial analysis and evaluation of the investment opportunity in spreadsheet format.

Things to Look For:

• Realistic revenue and expense projections.
• Sensitivity analysis for different scenarios.
• Alignment with market trends and data.

Questions to Ask:

• What assumptions underpin the financial projections?
• How were revenue and expense estimates calculated?
• What are the key risks to achieving the projected returns?

Example: If the proforma shows optimistic rental growth, ask how this compares to historical trends and market conditions.