What are you underwriting expenses?

[Gino Barbaro]

Hi Everyone,

I wanted to get an idea of what everyone is using as a per door expense figure?  I know that smaller properties are going to run much less, so I wanted to choose 50 units  and 100 units as sizes, and I understand cities will vary.

We are running between 4000-4500 per door in operating expenses in Knoxville for 100+units.  

This is the one area where all investors get tripped up. When we bought our first large complex, we were running at 2900 per unit. When we went to refi, the bank underwrote the expenses at 3500 per unit, and they ended up being correct.

If we go into a deal with incorrect expenses, it will blow up the entire deal.  Any answers would be greatly appreciated.  Looking to share with our community and continue to have them underwrite conservatively.  Good luck in this market, but you have to  stick to your guns.

thanks for taking the time to respond

Gino