Methodology
Calculation Boundary
ProformaPilot uses deterministic code for financial calculations. No language model creates or changes purchase price, rent, NOI, debt service, DSCR, refinance proceeds, cash flow, return, score, or maximum-offer results.
Income And Expenses
Effective gross income begins with selected monthly rent and other income, annualizes them, and applies vacancy. Operating expenses include management, maintenance, capital reserves, property tax, insurance, HOA, owner-paid utilities, and other recurring expenses. NOI is effective gross income minus operating expenses and excludes debt service.
Main Home And Accessory Dwellings
An optional dwelling schedule replaces combined unit, size and rent inputs. Each included dwelling contributes its selected market or local PHA rent; excluded dwellings contribute no rent. Unknown physical details remain unknown, and combined size totals include only entered values. Planned dwellings and future income are identified separately from existing units.
Additional dwelling build budgets are added to shared rehabilitation costs before the same contingency rate is applied. Additional monthly owner expenses are added to shared operating expenses. These costs remain in the model when a dwelling’s rent is excluded. ARV and financing are whole-property assumptions. Scenario rent and rehabilitation adjustments apply to every dwelling as well as shared costs. Results describe stabilized operation; construction timing, lease-up and first-year cash flow are not modeled. Users must include expected carrying costs in their holding assumptions.
Permanent Debt
The projected refinance is the lower of the ARV/LTV maximum and the principal supported by NOI at the target DSCR, stated interest rate, and amortization term. When NOI is not positive, the DSCR-supported refinance amount is zero.
Maximum Offer
Three independent purchase-price ceilings are solved algebraically: equity protection, target cap rate on total project cost, and maximum capital remaining after refinance. The recommendation is the lowest of the three active constraints. It does not use the seller asking price or proposed purchase price as an input to the ceiling itself.
Scenarios And Score
Conservative and optimistic scenarios change rent, vacancy, rehabilitation cost, ARV, and refinance rate using disclosed, deterministic adjustments. The score combines cash flow, DSCR, cap rate, equity cushion, capital recovery, and stated data confidence, followed by explicit penalties.
Required Verification
Users must independently verify ownership, title, property condition, permits, zoning, rent comparables, local payment standards, utility allowances, taxes, insurance, financing, rehabilitation costs, value comparables, and all legal or regulatory requirements.