Reforecasting build-to-rent from home delivery to occupied days

The initial case treated the builder schedule as the delivery schedule. It assumed all 240 homes would be rent-ready by year-end, generated 1,590 occupied home-months in Year 1 and reached 90% occupancy on September 30. At $86.40 million of project cost, the fixed loan commitment left $30.24 million to equity.

The current package does not support that curve. Site infrastructure was handed over later than planned. Municipal certificates trail the builder log on six homes. Twelve accepted homes have incomplete landscape, utility or punch work, and ten more are still in the owner's make-ready process. The cost report also carries $4.80 million more than the original budget, including the additional project interest produced by the later delivery.

Rebuilding the case at home level reduces Year 1 occupied home-months to 1,251 and NOI to $1.77 million. It moves 90% occupancy to February 28 and increases equity to $35.04 million. The year-end community still presents well: 240 homes are reported complete, 222 leases are executed and 212 residents have moved in. Those period-end counts do not restore the income lost earlier in the delivery curve.

The builder-complete date establishes the start of the reconciliation, not the start of rent. For each home, the revised schedule carries the certificate date, owner-acceptance date, make-ready completion and the date the home can actually be handed to a resident. The dates are not collapsed into one delivery field because each answers a different cash-flow question.

Owner acceptance controls when the home enters the owner's inventory and when builder obligations, holdbacks or forward-funding payments may change. Rent-ready status controls the earliest lease commencement. An executed lease can precede either date; its rent does not. The resident ledger then establishes the actual commencement and occupied days, including transfers, cancellations and delayed move-ins that do not appear in a signed-lease count.

At year-end, the six relevant counts are all different. The gap between 240 builder-complete homes and 218 rent-ready homes is not a 22-home vacancy assumption. It consists of six homes without certificates, six more awaiting owner acceptance and ten accepted homes still in make-ready. Those groups have different expected release dates and different cost ownership.

The same reconstruction changes the denominator used to read lease-up. The initial case produced 1,980 available home-months from its rent-ready curve. The current delivery record produces 1,638. Against those periods, executed leases are converted into 1,251 occupied home-months using actual and forecast commencement dates—not by multiplying the December occupancy rate through the year.

Scheduled rent falls by $899,000 when the occupied periods are rebuilt. The revised case also carries $265,000 of concessions from the current leasing offers rather than the $159,000 in the original plan. A concession attached to a signed lease follows its commencement month; it is not spread across homes that have not yet been accepted or made ready.

Operating expense falls by only $70,000 despite the $1.065 million revenue reduction. On-site staffing, model-home operation, security, landscape maintenance and most community costs are already running across the phased opening. The variable saving from fewer occupied homes does not offset the fixed cost of operating a community while the final homes move through acceptance and lease-up.

The result is $1.77 million of Year 1 NOI, $995,000 below the initial case. The model retains the December rent roll and occupancy as the exit point of the year, but it derives the income statement from monthly home status. This prevents a strong year-end leasing report from being used as if it had applied to the full operating period.

The cost revision and the leasing revision meet in the same monthly project cash flow. Site and infrastructure cost increases by $2.00 million. Vertical construction adds $1.60 million, amenities and landscape add $500,000, and the later opening consumes another $700,000 of soft cost, interest and contingency. Total project cost moves from $86.40 million to $91.20 million.

The $56.16 million construction commitment does not increase with that budget. Equity funds the $4.80 million cost movement, taking the requirement from $30.24 million to $35.04 million. At the same time, the 90% occupancy test moves by 151 days. The loan therefore remains in its construction period while the original case had already converted, and the associated carry is included in the revised cost schedule rather than shown as a footnote to stabilization.

A forward-purchase or tranche-funded structure would change the exact sources and uses, but not the required reconciliation. Payment eligibility would follow the contractual delivery and acceptance definition for each home. The operating case would still begin with the rent-ready date and earn rent only from lease commencement.

The delivery-level case separates decisions that are often combined into a single faster or slower lease-up sensitivity. Paying third-party punch teams adds cost but releases accepted homes earlier. Reducing concessions preserves face rent but lowers monthly absorption. A further builder delay changes both construction carry and the point at which leasing can begin. Each treatment produces a different relationship between occupied periods, NOI and equity.

In the accelerated-acceptance case, $800,000 of additional execution cost produces 129 more occupied home-months and reaches 90% occupancy by December 31. The lower-concession case reduces project cost by $200,000 but delays stabilization another month. The builder-delay downside removes another 156 occupied home-months and raises equity to $37.24 million. These are not rent-growth sensitivities applied to the same inventory curve; they change the curve itself.

Cap Orbit can work across the builder completion log, certificate register, owner-acceptance files, punch lists, make-ready work orders, leasing CRM export, executed leases, resident ledger, draw package, loan agreement, project cost report and existing underwriting workbook in the same deal. The reconciliation establishes a dated state history for each home before updating the model.

From that record, you can have Cap Orbit rebuild the rent-ready curve, calculate occupied home-months from lease commencement, apply concessions to the correct leases and update Year 1 revenue and expense in the house model. The same work carries revised infrastructure, vertical cost and interest through the construction sources and uses and returns the new equity requirement and conversion date.

The alternate cases remain tied to the home record. Accelerating punch work changes the affected rent-ready dates and cost. Reducing concessions changes leasing velocity and lease economics. Moving the final builder tranche changes acceptance, carry and availability. Each case returns the same comparable outputs: available home-months, occupied home-months, Year 1 NOI, project cost, required equity and stabilization.

That is the standard for AI on this asset class. A report of 240 completed homes is one source fact. The underwriting answer is the cash flow produced by the dated path from completion to acceptance, rent-ready status and resident occupancy.