Net Cash Flow is the bottom line of the Relm Pro pro-forma. It tells you what you'd actually have left over after operating the property and servicing debt.
The formula
NCF = NOI + Capital Items - Debt Service
That is:
- Net Operating Income (NOI) — gross potential rent + other income, minus vacancy, minus operating expenses.
- Capital Items — capex, tenant improvements, leasing commissions. These are netted in (positive line if you're tracking inflows like a sponsor capital contribution; negative line for spend).
- Debt Service — principal + interest on the modeled loan.
NCF is the line you use for IRR / equity-multiple math.
What's in NOI
- Gross Potential Rent (GPR) — sum of in-place rents at full occupancy.
- Other Income — parking, laundry, RUBS, late fees, pet rent, etc.
- Vacancy & Concessions — modeled as a percentage of GPR.
- Operating Expenses — property taxes, insurance, utilities, repairs & maintenance, payroll, marketing, management fee.
Relm builds these from your uploaded P&L if available; otherwise from market benchmarks for the asset class and submarket, with each assumption marked as such. See Generate with AI.
What's in Capital Items
This is intentionally a single line in NCF rather than a buried sub-table. It includes:
- Capex — roof replacements, HVAC overhauls, parking lot resurfacing.
- Unit turn / value-add capex — interior renovations.
- Tenant Improvements (TI) — for commercial deals.
- Leasing Commissions (LC) — for commercial deals.
- One-time inflows — capital contributions, refunds, etc., entered as positive numbers.
Treat the line as net: a $50,000 roof replaced in year 3 shows up as a -$50,000 capital item that year.
What's in Debt Service
Debt service is principal + interest on the modeled loan, calculated from the purchase price, down payment, interest rate, and loan term in the pro-forma's financing inputs. The model uses a single amortizing loan — interest-only periods and multiple tranches (senior + mezz, or assumable + supplemental) aren't modeled separately today.
Why this formula and not "free cash flow" or "levered cash flow"
NCF as defined here is the closest analog to Levered Cash Flow in institutional usage. We use the term "Net Cash Flow" because it's how the operators we work with talk: it's the cash the property throws off to equity, period.
If you want to compute Unlevered Cash Flow (NOI + Capital Items, no debt), add the capital items to the Net Operating Income line — the pro-forma lists capital items directly under NOI.
In Excel formulas Relm emits
When Relm writes formulas into your worksheet via the Excel add-in, we wrap the NCF lines and many other derived cells with IFERROR(...,"") so empty or error states render blank rather than #REF! or #DIV/0!. If you're modifying these formulas, keep that pattern — it makes a half-built model still readable.
One difference to know: capital items aren't carried into Relm's Excel output (the add-in or the Export Excel download), so the worksheet's Net Cash Flow row is NOI minus debt service. If the property has capital items, add them back when you reconcile Excel against the pro-forma in Relm.