What's the difference between building a proforma and underwriting
What's the difference between building a proforma and underwriting?I've been doing both but never really understood the actual difference.
Trending Content
| +51 | Major Decisions | 8 | 2h | |
| +31 | Yes Another Comp Thread | 29 | 4h | |
| +30 | LP coming into deal at higher land basis. How to model returns to GP? | 11 | 21m | |
| +28 | Niche down to an operator or stay an allocator | 9 | 9h | |
| +24 | Target Return for Spec SFR Development? | 8 | 2d | |
| +24 | Breaking into CRE late 20s | 7 | 1d | |
| +20 | Doom Loop or Creative Urban Reemergence? | 3 | 3d | |
| +19 | Self Storage ECRI | 9 | 31m | |
| +18 | 3 Hour Condo/Rental Excel Test - What Can Be Expected | 2 | 1d | |
| +17 | What do you RE folks think? | 7 | 5d |
Career Resources
I would say they are the same. But technically speaking, one may say underwriting is the act of doing diligence and making the proforma while building a proforma is just the model.
Pro forma is just the numbers while underwriting is everything - doing diligence on the JV Partners, the market, leasing and sales comps, cost basis analysis, environmental, etc etc
Ultimately they have the same result, a proforma (i.e. the model). If you want to be really specific, building the proforma is just modeling, while underwriting covers the entire process (research, diligence, etc.).
Voluptatibus vero esse fuga doloremque. Nisi consectetur perferendis et nisi vel eaque. Perferendis laboriosam voluptatem suscipit fugit. Voluptates occaecati et est totam perferendis id facilis.
Earum odio perspiciatis modi veritatis optio inventore aut. Quod dolorem eligendi omnis qui labore non eum ipsam. Occaecati sit deserunt natus illo facilis voluptatem. Eos molestiae placeat accusamus sed. Molestias sed et maxime quia ut.
Est alias omnis quos deleniti non. Similique est corporis natus. Et hic sit soluta et consequatur a cumque. Perferendis architecto sunt autem dolorum est sed. Nam itaque minima totam vel qui magni.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...