How to use the Cash Flow Projection.
Six steps from operating assumptions to a 10-year levered cash flow with LP-facing returns. Plus practitioner tips on stabilized NOI alignment, expense growth, IO + amort triggers, and exit cap-rate honesty.
A. Six steps
- 1
Download the Cash Flow Projection workbook
You receive an XLSX with monthly + annual tabs spanning a 10-year hold. Save as
CashFlow_<Deal>_<YYYY-MM>.xlsx. The model is built to live alongside the UW Workbook — pulling base case from UW, projecting forward. - 2
Set the operating assumptions on the input tab
Inputs: stabilized NOI · vacancy assumption · expense growth (insurance, taxes, repairs, utilities, management fee) · revenue growth (market rent escalation, other income) · capex reserve · turnover cost · concession assumptions. Use the same conventions you used in the UW Workbook; the two should reconcile.
- 3
Layer the debt structure on the Debt tab
Senior debt: rate · term · IO period · amortization · maturity. Mezz / pref equity if applicable: rate · accrual treatment · paydown order. The model auto-calculates debt service per month and reconciles cash flow waterfall to equity distributions.
- 4
Run the levered + unlevered cash flow tabs
Two parallel projections: unlevered (operating cash flow before debt) and levered (after debt service). Both feed into the Returns tab. Stress-test by toggling the rate-environment assumptions; the model regenerates both projections in 2-3 seconds.
- 5
Build the exit scenario on the Exit tab
Exit assumption: sale year · exit cap rate · transaction costs (broker fee, legal, closing). The Returns tab calculates IRR, equity multiple, and CoC year-by-year for both unlevered and levered. Refi scenarios use a separate row with refi proceeds + cash-out treatment.
- 6
Export the LP-facing returns table
The Returns tab is print-ready: equity multiple · IRR · average CoC · peak negative cash position · refi cash-out (if applicable) · downside-case IRR. Save as PDF for the LP packet; the full workbook stays as backup.
B. Practitioner tips
- Stabilized NOI from the UW Workbook should be year-2 or year-3 NOI in this model — not year-1. Year-1 is lease-up / renovation period, not stabilized.
- Expense growth: assume 3-4% across the board unless you have specific data otherwise. Insurance has been growing faster than this in coastal markets; tax growth depends on reassessment policy.
- IO period: the model handles partial-IO (e.g., 3 years IO, then amortizing) but you have to set the trigger date on the Debt tab. Default is full-IO.
- Mezz pay-current vs accrual: pay-current reduces equity distributions monthly; accrual compounds into the takeout. The waterfall treats these differently — verify the toggle matches your structure.
- Exit cap rate: most institutional UWs add 25-50 bps to the going-in cap rate at exit ("cap-rate decompression"). Be honest about whether this is conservative or aggressive in your sensitivity.
- Refi vs hold-to-exit: the model lets you model a refi at year 5 with a hold to year 10. Useful for value-add bridge-to-perm patterns. Make sure the refi rate assumption is supportable.
C. Scope & limits
- Not a fund-level model. This projects single-asset cash flow; fund waterfalls (preferred return, catch-up, promote) need a separate fund model.
- Not for portfolio cross-allocation. Each asset gets its own workbook; cross-collateralized structures need additional adaptation.
- No Monte Carlo or stochastic modeling. Sensitivity is deterministic — change one assumption, see the output.
- Not for non-CRE asset classes. Built for income-producing real estate; private equity / venture / debt-fund-level projections need different conventions.
D. Pairs with
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Asset Manager
Agent (forthcoming Q4 2026)
Updates the projection with actuals; runs variance commentary against the original underwriting.
-
Investor Update Drafter
Skill (forthcoming Q4 2026)
Pulls the Returns tab + current-period actuals; drafts the quarterly LP letter.
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UW Workbook
Template (available now)
Source of the base-case assumptions; the two models should always reconcile at stabilization.
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Sensitivity Analyses
Template (available now)
For deeper sensitivity work — cap-rate decompression scenarios, exit-year shifts, refi-window stress tests.
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Variance Commentary
Skill (forthcoming Q4 2026)
Compares projection vs actuals each period; produces the narrative for the LP reporting cycle.
Next step
Build the full stack around it.
This template is the work surface for a specific AI agent + skill workflow. Open the Company Builder and assemble the matching agents when they ship Q3 2026.