All Forum Posts by: Barry Ruby

@Josh Ess Good One Josh!

@Alexander Straffin

Alexander, your first priority should be to become financially literate and know how to conduct pro forma underwriting. Please let me know if you need any help with doing this and can send you some information to get you started.

@Josh Milewski

Josh, the principal metric used to measure the amount of leverage (Loans) that can be placed on a deal is the Debt Service Coverage Ratio (DSCR).

The easiest way to understand this factor is that the lender wants to know how much net operating income (NOI) is available to service the debt (principal and interest payments).

A good rule of thumb is to look for no less than a 1.20 DSCR. This means that for every $1 dollar of debt there's $1.25 of NOI to service (cover) the debt payment.

Let me know if you need any help with this.

@Thomas Lebens

I’d be happy to review your worksheet and share snap shots of mine with you.

@Adrian Wooten

Adrian, your first step must be to establish the value of the planned project.

This is done by determining the unit mix, size, and rental rates which yields Gross Potential Rental income. Deduct vacancies Operating Expenses to determine Net Operating Income.

Value is calculated by dividing NOI by an assumed Cap Rate. Deducting a target development profit and commissions and closing costs produces the total project budget you have to work with.

Feel free to contact me if you need help with this.

@Pepper Bradford

There is no danger in someone going around you if you have the deal tied up and under contract correctly.

This means having a set of terms and conditions that matches the time needed to fully vet the property and get your financing buttoned-up.

Let me know if you need any help with this

@Noah Tsehaye

Noah, congratulations on your decision to get into the real estate biz.

The biggest favor that you can do for yourself is to become financially literate and learn how to conduct pro forma analysis to underwrite deals that interest you.

Feel free to contact me if you need any help.

@Jacob Hannawa

Jacob, I am interested in seeing the tool you have created please let me know if you can provide more information about it

Thanks

@Alex Ng

In a Ground up development, I look

for a project profit generated after the first full year of operations equal to the equity invested in the deal.

I underwrite a Value Add deal to meet a targeted acquisition cap rate based on the actual operating data of the property’s T-12 performance.

@Nicholas Otero

Hi Nicholas thank you for your service and congratulations on completing it. As a fellow ex-airman it would be my pleasure and honor to help you.

Please feel to contact me with any questions you might have in gaining financial literacy and investing skills.