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Sample Pro Forma Single Family Rentats" Net operating income (Nol) is calculated by subtracting total operating expenses from gross effectiveincome. This indicates the amount of income available to pay debt servte and provide for ,,debt servicecoverage.l'' "Supportable debt" is then automaticalty calculated by a formula based on the Nol and the assumptions inthe "supportable debt service calculation" grid. ln this example, the calculation assumes a debt service ratiool t.2, which means that the NOI must be 1.2 times (ar 2l%higher) than the amount available for debtservice. The debt service amount is also calculated automatically based on the supportable debt amount.B. zGYEAR CASH FIOW PROJECTIONIt is a standard requirement of lenders for borrowers to provide a multi-year cash flow projection for aperiod of years equal to the term of the loan. This proiection spreadsheet allows users to enter assumptionsabout inflation in rents and operating costs which automatically calculate increased income and expenseamounts for each year. This projection is used primarily to demonstrate that the debt service can be paid ineach year.