Property development cash flow, the guide

Why monthly, not annual

Annual cashflow understates peak debt. The peak balance of a construction loan typically sits in months 22–28 of a 30-month program, within a single financial year, but easy to miss if you only have annual rollups. Lenders test against the monthly peak, not the annual rollup.

Drawdown logic

The standard rule: equity drawn first (acquisition, deposits, design), debt drawn against monthly progress claims once construction starts, then settled down on dwelling settlements. Some structures invert this with capitalised interest that compounds the debt balance until first settlement.

Settlement waterfall

Apartments don't all settle on PC day. A typical waterfall has 40% in the first month, 30% in month two, 20% in month three, 10% in months four through six. Townhouses settle stage-by-stage as each completes.

Reading peak debt and IRR

Peak debt is the largest balance the cashflow ever carries, read straight off the cumulative balance line. Equity IRR is the discount rate that makes the equity-side cashflow NPV equal zero, almost always higher than profit on cost because IRR is annualised.