A pro forma is a method of calculating financial results which emphasizes current or projected figures. Pro forma financial statements are commonly used to determine the potential viability of a real estate investment, as well as to show potential investors who may be interested in putting money into a project. Pro forma operating budgets are often one of the most important documents in a loan package, as they give a lender an idea of what your property’s expenses will look like, especially when compared to the property’s projected income.

To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, fill out the form and a HUD lending expert will get in touch.

Pro forma calculations are used to project the potential profitability of a business. Small business owners may use pro forma financial statements to showcase the potential of their business to lenders and investors. Pro forma financial statements are often used to determine the potential viability of a real estate investment, as well as to show potential investors who may be interested in putting money into a project. For example, HUD multifamily construction loans, such as the HUD 221(d)(4) loan, often require pro forma financial statements. To learn more about HUD multifamily construction loans, click here.

The benefits of using a pro forma for commercial real estate include being able to accurately project the potential profitability of a property, as well as to show potential investors who may be interested in putting money into a project. Pro forma financial statements are commonly used to determine the potential viability of a real estate investment, and are often one of the most important documents in a loan package, as they give a lender an idea of what your property’s expenses will look like, especially when compared to the property’s projected income. Source

The risks associated with using a pro forma for small business financing include the potential for inaccurate projections, which can lead to an underestimation of the costs associated with the project. Additionally, lenders may not be able to accurately assess the risk of the project if the pro forma does not include all of the necessary information. It is important to ensure that the pro forma is accurate and complete before submitting it to a lender.

For more information on pro formas and the HUD 221(d)(4) loan program, check out our detailed guide.

To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, fill out the form below and a HUD lending expert will get in touch.

A pro forma for commercial real estate typically includes the following sections:

• Location Report: This section typically includes a property’s address, descriptions of all buildings on the property (and their dimensions), a map of the site, and aerial images of the property.
• Site Description: Detailed site information, often mentioning site visibility, access roads, and other important data.
• Property Condition: Additional information about the property, including a description of its current condition.
• Tenant Data: Details about the tenants currently leasing parts of the property. This may include company information, creditworthiness, a rent roll, and any other relevant information.
• Proforma: A proforma will typically include net operating income, gross potential income, expenses, and any other important metrics. This may either be a stabilized or multi-year proforma.
• Comparable Market Listings/Sales Report: This section includes reports about at least three similar properties for sale in the area, also detailing three similar properties that have recently sold. The report may analyze the properties and discuss similarities and differences with the subject property.
• Market Trends Report: Details of importance to the commercial real estate market in including employment, population, and building construction trends. Leasing data, traffic trends, and other information may also be included.
• Market Value Estimation: The market value estimation takes the data from the proforma, as well as the income and sales comparison approaches to estimate a range of values for the subject property.

To learn more about HUD multifamily construction loans like the HUD 221(d)(4) loan, click here.

A pro forma can help small business owners secure financing by providing lenders with an accurate picture of the potential profitability of the business. Pro forma financial statements are commonly used to determine the potential viability of a real estate investment, as well as to show potential investors who may be interested in putting money into a project. Pro forma operating budgets are often one of the most important documents in a loan package, as they give a lender an idea of what your property’s expenses will look like, especially when compared to the property’s projected income.

For more information on pro forma financial statements and how they can help small business owners secure financing, check out this article and this article.