Could someone go into a bit of detail of how different the proforma model may be for underwriting a large multi-family development compared to doing acquisitions where you are solely buying the already developed asset? What other forms of information would you be looking at? I know this is broad but looking for any insight
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Biggest differences are going to be:
Including an full fledged development budget rather than maybe just a couple capex items
Running the development costs through the cash flow based on when you think they're likely to occur (some people like to do a bell curve or s curve here)
Modelling the sources and uses such that the debt begins to draw based on costs incurred (typically with all the equity/mezz going in first)
Including an operating deficit function within the development budget so that you're setting aside a line item for the first few months where operations are yielding negative cash flow
Modelling an iterative interest reserve within the budget for the construction debt (you'll want a circ breaker here). Then you'll usually model an interim income offset against the interest reserve - such that any positive net cash flow that occurs during the construction period first goes to offset interest expense, then goes to knock down the debt or offset debt proceeds
Underwriting the actual lease-up/absorption of the property - e.g. you're absorbing x units per month with some % of income abated due to concessions, meanwhile some of your expenses are ramping up based on occupancy