📌Underwriting Multifamily Deals

[Justin Goodin]

📌 Discussion Topic

For those that are actively looking for deals and submitting offers:

1. What analyzer are you currently using to UW deals?

2. Out of all the deals that you UW, how many ‘pencil out’ to get the returns you are looking for?

3. Any tips/tricks/resources you can share that have helped you UW deals and get closer to some of these asking prices?

[Erik W.]

What analyzer?  Custom-made spreadsheet.

How many penciled out?  In 2021 -- 7 of 11.  I've gotten better at "pre-screening" deals that don't make it to full analysis.  I don't keep a full count, but I estimate about 80 or so deals haven't made it to full analysis this year.  Mostly I use the "% Rule"...but also having dealt with commercial more this year one thinks in terms of creative repurposing.

Tips/Tricks/Resources?  All cash, close quickly, zero contingencies other than clear title which is how I've operated the past 10 years or so.  Recently, I've had to also offer at or over asking prices, which is one reason I've slowed down a bit as there aren't as many deals that make it to the full analysis stage.  Still...working now on taking down a package of 68 units--mix of mostly SFHs, a couple of duplexes, and a 4-plex.  Fun times!