Underwriting a Multifamily

[Max Lichtenstein]

Hi BP community,

I am looking to purchase a multifamily two unit apartment by next summer. I have contacted a couple agents in the location and explained my story/ where I am at. Do they underwrite a property for you?

Underwriting is something I understand the basis of but not much after that. I would like to learn much more if anyone could provide some information, would be much appreciated.

[Curtis Bluth]

Quote from @Max Lichtenstein:

Hi BP community,

I am looking to purchase a multifamily two unit apartment by next summer. I have contacted a couple agents in the location and explained my story/ where I am at. Do they underwrite a property for you?

Underwriting is something I understand the basis of but not much after that. I would like to learn much more if anyone could provide some information, would be much appreciated.

Max,

underwriting is a process that’s typically done internally by each investment group, and good brokers/agents will perform a preliminary underwriting for you as well (although typically their numbers are known to be inaccurate). You’re not going to find agents that will typically offer to perform UW work for you on the size of deal you mentioned, but they will for larger properties.

if you’re interested in learning underwriting, I would recommend downloading some pro forma excel models to get a better idea of how they work. There are also certificate courses through universities and private groups (such as adventuresincre.com). 

Ultimately, I think it’s unwise to buy any property without performing some kind of financial analysis of the property and your business plan to operate the property. It would be best to dive in and learn it to avoid potentially getting ‘burned’ by what you don’t know.

Feel free to DM me to chat!