How to Walk Through a Multifamily Pro Forma in a REPE Interview

"Walk me through your pro forma" is the REPE equivalent of "walk me through an LBO." You need a fixed order, the right vocabulary, and the courage to stop so they can dig into vacancy or exit cap. Do not invent a new structure every time; muscle memory wins Superday nerves.

The 90-second walkthrough

"I start from the rent roll to build gross potential rent, then apply vacancy, concessions, and other income to get effective gross income. I subtract operating expenses to get NOI. I size debt off LTV and DSCR, calculate debt service, and get cash flow after debt service after CapEx and reserves. I hold for N years, exit using forward NOI over an exit cap, pay off debt and selling costs, and compute levered IRR and equity multiple. I sensitize rent, vacancy, and exit cap."

Full framework

Formulas to have cold

NOI = EGI ? OpEx
DSCR = NOI ? Debt Service
Exit Value = Forward NOI ? Exit Cap
Equity Multiple = Total Equity Inflows ? Equity Invested

Income line detail that gets you grilled

Gross potential rent should map to the rent roll: unit count, in-place rents, and market rents. Loss-to-lease is the gap between in-place and market; your mark-to-market pace is a thesis, not a freebie. Vacancy and concessions are not the same thing. Other income (parking, laundry, pet fees) can be real, but do not grow it faster than units without a story.

Where candidates get grilled

Value-add overlay

If renovate:

1. CapEx schedule by year
2. Downtime / vacancy during turns
3. Rent premiums phased in
4. Do not stabilize Year 1 unless the prompt forces it
5. Tax reassessment risk after purchase or renovation

Interviewers love catching optimism: renovating 100% of units in year one with no downtime is a red flag.

Unlevered vs levered

Unlevered uses property cash flows before debt. Levered includes debt service and a smaller equity check. Interviewers may ask both; know which risk you are measuring.

Exit and returns verbal

At exit, say whether you used trailing or forward NOI, why exit cap sits above or near going-in, and what selling costs you deduct. Then: gross sale price, net after costs, debt payoff, equity residual, plus interim BTCF, into IRR and equity multiple. If they ask MOIC vs IRR, know both.

Common traps

1. Jumping to IRR before NOI is clean
2. Putting CapEx inside NOI when the shop treats it below the line
3. Ignoring tax and insurance growth
4. Exit on Year N NOI without saying trailing vs forward
5. Forgetting selling costs or prepayment penalties
6. Stabilizing a value-add too early

Expense growth realism

Taxes and insurance have been interview landmines for years. If your OpEx grows at a flat 2% while the market has seen double-digit insurance moves, expect a challenge. Payroll and contract services should reflect staffing for the unit count and amenity package. Management fees are often a percent of EGI: when income rises, the fee rises too. State those links so the expense stack does not look pasted from a template.

Sensitivity set you should name unprompted

Rent growth, vacancy, expense inflation, exit cap, and interest rate or DSCR. You do not need a full tornado chart in the verbal. Naming the five and which one hurts equity most is enough to show you underwrite, not just fill rows.

Practice drill

Timed 90-second verbal, then five minutes of follow-ups on exit cap and DSCR. Build reps on Project Sunbelt. Read NOI vs EBITDA and Exit Cap vs Going-In. For coverage math, pair with DSCR Interview Questions.

How to handle interruptions

If they stop you at vacancy, answer that dig, then resume from NOI without restarting the whole speech. Carry a mental bookmark: "Back to the stack: we have NOI, next I size debt." That recovery move looks polished.