There are two distinct property types and accommodating methods of developing a discounted cash flow analysis for each. The property types are income producing properties and those projects that are liquidated to repay the debt. This definition section deals with income producing properties and a discounted cash flow method called "Simultaneous Valuation."  This income property evaluation is the report we will furnish you for your presentation.  It covers a 10 year discounted cash flow analysis, plus the project's reversion (selling) year.

Simultaneous Valuation, as a formula to determine the value of an income property based on a discounted cash flow method, was developed by Ms. Suzanne Mellen, Managing Partner, Hospitality Valuation Services, San Francisco, California, back in 1984. It addresses the required yield on debt and equity to determine a project’s estimated value. Unlike capitalization which can only be used if a project has stabilized in occupancy, a discounted cash flow method can be used for both stabilized projects and those income producing projects that are in the process of achieving stabilization. However, it is important (as with developing a cap rate) to use only data that would be considered "typical" for the project. Many times an appraiser or investor will use both methods as a comparison when a project has stabilized. In the Final Conclusion software program, discounted cash flow reports are completed for all three components related to the discounting process. These are the leverage portion of the investment (loan); the equity portion (investment) and the overall property yield which is a derivative of both. (For evaluation process, see also the definition under Capitalization).