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Want to see exactly how I underwrote this $32,000,000 ground up development deal?

Click the video link below to watch a high level overview on the underwriting assumptions I made on my latest development project.

I followed these 5 steps when underwriting this development deal:

1. Proforma Income 📈

You MUST know your market. You are making educated assumptions about what will charge for rent and auxiliary income 2 years in the future.
In our recent deal, our projected rents are below what comps are achieving today and we are NOT growing rents for 2 years.
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2. Expenses 📊

Verify with a PM what your operating expenses will be. Add a buffer. Budget more for marketing during the lease up. Have your operating expenses grow as the occupancy increases.
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3. Debt & Equity 💲

In our case, we are spending investor equity first and then drawing on our construction loan only when we need to. Local banks are best to work with and can be competitive on terms.
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4. Refinance 💡

It's common for developers to refinance out of the construction loan and into permanent financing. Use a cap rate higher than what you think it will be. Budget for loan fees. Verify you have a comfortable DSCR in your refinance month.
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5. Exit 😎

Are you planning to sell after construction completion? Long term hold? Assign a cap rate to determine the valuation at sale year. Budget for broker fees based on the sale price you are shooting for.

Hope you enjoyed the underwriting overview. Let me know if you have any questions or want to be notified when we have our next deal!

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• U.S. MACRO OUTLOOK

• 76,000 Build-to-Rent Units Under Construction in the South

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📈 Modeling Your Success,

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• Outsource Your Underwriting

📈 Are you looking to outsource your multifamily underwriting to an experienced analyst?

Why outsource your underwriting?

• Save time

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Schedule a call with me today so we can discuss your exact underwriting needs.