The cash flow distribution schedule is commonly referred to as a “pro forma”. The analysis forecasts income, expenses and expected returns associated with a real estate project. The cash flows are projected for a period of time through study, research, and experience although regardless of the experience and expertise, there is “looking through a crystal ball” projecting events into the future. The analysis is prepared for a variety of purposes but mostly to attract capital (debt and equity) to a specific project.
This reading provides the background and information to prepare a simple valuation analysis for a land development project.