Underwriting
Reading operating statements a seller prepared
The document is real. Whether it describes the property you will own is a separate question.
Underwriting
Cap rate, cash-on-cash, DSCR and the assumptions people fudge.
Underwriting
The assumptions that break deals, ranked
A summary of where underwriting actually goes wrong, in rough order of how much money each error costs.
Underwriting
The offer: contingencies, timelines and leverage
Price is one term among many, and the others frequently determine whether you win the property and whether you regret it.
Underwriting
Portfolio-level underwriting: the risks you cannot see one deal at a time
Every property can pass its own stress test while the portfolio fails, because the same shock hits all of them at once.
Underwriting
Underwriting a value-add plan without fooling yourself
The gap between a renovation budget and a renovation outcome is the most reliably underestimated number in the business.
Underwriting
Valuing small multifamily when the comps do not exist
Two to four units sits awkwardly between residential comparables and income capitalization, and which method applies determines the price.
Underwriting
The inspection, and what it will not find
A general inspection is a visual survey by a generalist, and the expensive problems are usually the ones behind something.
Underwriting
Stress testing a deal before you sign
The base case tells you what the deal does if you are right. The stress case tells you what happens when you are not, which is the more common condition.
Underwriting
Internal rate of return, and what it hides
The metric that accounts for timing is also the one most easily manipulated by changing assumptions nobody checks.
Underwriting
The expense line items people always get wrong
Six categories account for most of the gap between projected and actual operating expenses, and all six are knowable in advance.
Underwriting
Building a rent roll you can trust
The document the seller hands you is a summary of claims. Verifying it is the most productive hour in any acquisition.
Underwriting
DSCR: the number your lender cares about most
Debt service coverage ratio decides whether a loan gets made, at what size, and how much room you have before the deal is in trouble.
Underwriting
Cash-on-cash return, and why leverage flatters it
The metric that tells you what your money earns also makes the riskiest deals look the best, which is worth understanding before you use it.