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 any modeled loan(s).
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 any modeled loan. If you model an interest-only period, those years' debt service is just interest; principal kicks in once amortization starts.
If you have multiple tranches (senior + mezz, or assumable + supplemental), Relm sums them.
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), simply read the line above debt service. The pro-forma exposes both.
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.