30 Days of Free Multifamily Underwriting Tips

[Jason Baik]

My last post about my start in real estate got a decent amount of traction and I'm looking to continue providing some value to those starting out.

I'm a former data scientist and my superpower on teams is underwriting so I'm sharing tips / advice / perspectives on this niche skillset.

Underwriting isn't the most glamorous or lucrative skillset but if you're just starting out, it's (in my opinion) the BEST way to build your knowledge and confidence. You can find deals or raise capital by reiterating some key points but being an underwriter means you're the one responsible for most of the numbers-related questions. You're forced to learn about debt, market rents, investor returns, macro trends, sensitivity analyses etc. in order to underwrite effectively and help your team navigate getting that deal closed.

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Tip #1/ Underwriting neither begins nor ends with a spreadsheet. If you’re defaulting straight to an Excel when you’re looking at a deal, your process can become more efficient. My personal tip? Drive around on Google Maps first. Does this look like a place that you’d want to invest?

I'm guilty of spending 5 hours filling out a spreadsheet before realizing the property was in a class D area (which isn’t my strategy).

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I'll continue to update this thread every single day (workdays and non-holidays) for the next 30 days.

Jason

[Jason Baik]

#2
Back-of-the-napkin math is great for investors who already know what they’re doing, but newer investors really need to master the numbers behind real estate. There’s a ton of levers that impact returns - you should either know how to overcome these obstacles through experience or learn how to plan for them.

If you’re starting in multifamily, accept that underwriting requires some work and dive head first into spreadsheets. Udemy classes, digital events, and masterminds are a great place to start.

You want to learn how to swim? You start wading in pools… you don’t take a bath at home and expect to learn the backstroke.

You want to learn to underwrite? Dive into the spreadsheet. Don’t use oversimplified rules as a crutch. I know it’s easier to just divide a few numbers but I promise you it’s not doing you any favors.

#3
Anyway, here’s a list of free (or very low-cost) resources that will teach you how to underwrite:

Justin Kivel on Udemy
➕ good logical flow⠀
➕ Udemy course that walks you through⠀
➕ can buy it on sale for ~$15⠀
➖ a bit overwhelming with the details⠀
⠀
Michael Blank course
➕ in-depth⠀
➕ has a video tutorial + examples ⠀
➖ ~$130⠀

Symon He ⠀
➕ video course explaining the spreadsheets⠀
➕ includes all the core needs of MF⠀
➖ choppy flow. ordering of course sometimes confusing⠀

One-off Youtube videos:
https://www.youtube.com/watch?v=zQeLumLMlAE

https://www.youtube.com/watch?v=61dfn1RuJdg

https://www.youtube.com/watch?v=MoDMfwP5AVk

https://www.youtube.com/watch?v=Y0n8qJyBgyk

Why do I share this?

Because these are the same exact resources that I spent the last half year improving upon.