Edified Equity Podcast Episode 46: Underwriting 104 Door, C Class, Apartment Community

Edified Equity

Edified Equity Podcast Episode 46: Underwriting a 104 Door, C Class, Apartment Community – A Case Study Show Notes: Welcome to the Edified Equity Podcast! My Name’s Dino and Here we will focus on all of the unique Benefits associated with being a Passive Equity Investor in an Apartment Syndication. You can learn more about, and follow, us on the Web, iTunes, Stitcher, FB, YouTube, Linkedin, Instagram, & our Award Winning Blog on Bigger Pockets. All associated links will be in the show notes. If you Find this information Helpful Please Subscribe, Like, Comment, Rate & Review! Associated Links! Edified Equity Website: http://www.edifiedequity.com/ Edified Equity Podcast iTunes: https://itunes.apple.com/us/podcast/dino-pierce/id1381283719?mt=2 Edified Equity Podcast Stitcher: http://www.stitcher.com/s?fid=185852&refid=stpr Edified Equity Facebook Group: https://www.facebook.com/groups/MultifamilyPassiveCashFlow// Edified Equity YouTube Channel: https://www.youtube.com/channel/UCiTMeHhVXIMgCujDzXTxkww Bigger Pockets Blog: https://www.biggerpockets.com/blogs/10726-benefits-multifamily-passive-investors Edified Equity Podcast Episode 46: Underwriting a 104 Door, C Class, Apartment Community – A Case Study NOTE: This was for Educational Purposes ONLY and was NOT representative of an actual Acquisition. Michael Blank’s Syndicated Deal Analyzer: http://www.themichaelblank.com/syndicated-deal-analyzer/ We pulled back the curtain and shared our Underwriting Method on a 104 Door, C Class, Apt Community located in a Solid B area. The Apartment was 25 to 50% below market rent, mismanaged, in need of renovations, & 20% vacant. This scenario allows us to create value and appreciate upside quickly within the 1st 3 years. Long story short we worked with our property management company, lenders, the assessor’s office, chamber of commerce, cost segregation professionals, and purchased it for $4,098,100.00 ($39,405.00/Door). We’re implementing our business plan and will operate/execute aggressively although we underwrote conservatively in the following ways: 1) Modeled a Higher Cap at resale increasing our exit Cap by 1.2% 2) Slow on the upside ramp up & Value Add (PM thought we could do this over 12-18mo & we modeled 3yrs) 3) Kept our Expenses Higher than anticipated 4) Stayed Low on Rent Potential. We kept increases under the low end of Comps. Only increasing them enough to gain a 20% ROI on the rehab. 5) Overestimated on Taxes 6) Kept Vacancy much Higher than anticipated (5% for Market we’re at 12%) 7) Went Above the NOI with Replacement Reserves Ultimately our goal is to increase our NOI and add 3.5MM in value. We’re holding it for 5years and will sell or refinance and hold. We have long-term debt locked and feel confident we can weather a storm allowing us to sell on opportunity vs the calendar. I hope you found this information helpful. Whether you are here for the education, entertainment, or If you, or someone you know, has a problem finding the right place to invest their money - please help them by sharing this info. I don’t have anything to sell BUT I AM on a mission and I will be delivering quality, consultative, educational, content on a routine basis! Thanks for Tuning in- Make it a great day - you certainly deserve it! This is Dino Pierce CEO of Edified Equity Signing off - Goodbye #biggerpockets #leadership #business #podcasting #relationships #multifamilyinvestments #impactinvesting #trust #costsegregation #apartments #syndication #equity #directinvestments #cashflow #appreciation #taxshelter #solo401kinvesting #selfdirectedira #passiveincome #alternativeinvestments #highnetworthindividuals #familyoffice #generationalwealth #trusts #privatemoney #privateequity #duediligence #realestate #realestateinvestor #realestatelife #realestateinvesting #legacy #legacyplanning #ROI #multifamily #multifamilyinvesting #investing #investor #investment #entrepreneur #entrepreneurlife #entrepreneurship #hardassets #apartments #ap