UNDERWRITING ACCURACY QUESTIONS

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Hey, 

I wanted to just ask a couple questions regarding some aspects that will impact underwriting of multi-family properties.. I've really been putting in a ton of work to learn the ins and outs of the game here but I'm trying to get a more thorough understanding of a couple aspects in regards to underwriting. 

A lot of the numbers we input in underwriting models are pretty concrete to know such as mortgage rates, LTV, amortization, certain expenses etc.. but its the unknowns that can greatly skew an underwriting model such as renovation costs if you mess it up..

So, my question would be.. How can we determine "ACCURATELY" the cost of the renovations we "plan" to do to a property to ensure we aren't making a good deal bad or buying a bad deal. I feel if you underestimate this line item it can greatly screw you over..

I would think, that perhaps when you do a walk through of a property you bring a contractor with you to get an idea.. sound right? 

But then this leads to another question.. How much money are you likely to go out of pocket before even locking up a deal? And IF the deal falls through then the cash you spent on this is "wasted".. 

So, what are your ideas, thoughts, and attitudes on how to accurately figure out reno costs, as well as costs you can incur without even locking up a deal?

Cheers friends! 

Kory Louvelle