Episode 3: Apartment Proforma – Don’t Forget These Costs!

Before a shovel ever hits the ground, every successful real estate development starts with a proforma.In this episode of the RMS Real Estate Development Podcast, Curtis Way and Dan Demers break down one of the most important tools in development: the apartment proforma. From land costs and construction budgets to financing, operating expenses, rental assumptions, and long-term returns, they walk through the numbers developers use to determine whether a project is viable.The discussion covers how proformas help identify risk, why they must be continually updated throughout the development process, and some of the common mistakes that can lead to costly surprises.Topics include:Land acquisition and off-site costsConstruction budgeting and contingenciesSoft costs, consultants, and legal feesCMHC financing and mortgage insurance feesMarketing and lease-up costsRental assumptions and vacancy ratesOperating expenses and property taxesCap rates, valuation, and investment returnsCash-on-cash return versus internal rate of return (IRR)Why developers need to be realistic with their numbersWhether you're an aspiring developer, investor, lender, or simply curious about how real estate projects are evaluated, this episode provides a practical look at the financial framework behind apartment development.One lesson stands above all others: a proforma is only valuable if you're honest with yourself about the assumptions behind it.To learn more about the RMS Group, please visit: https://rms-group.ca/This series was produced by Road 55 in Edmonton, Alberta – Learn more at: road55.ca