Hello and welcome back to the Real Estate Asset Management Podcast! Today we talk all things underwriting, with co-founder and principal of Lone Star Capital, Rob Beardsley. In this episode, Beardsley shares some of his vast knowledge on all the components that make up the underwriting process, and guides us through the ins and outs of using the analytical tools at your disposal to create a solid evaluation of your real estate investment (hint: a simple but robust underwriting model is crucial). We also get some advanced tips from his new book The Definitive Guide to Underwriting Multi-Family Acquisition, on making it to the other side of your ups and downs so you can get a permanent win. From rent growth to the relationship between cap rate compression analysis and bond yields during rent inflation, we get all the top insights and more... Tune in today and level up your asset management ability!
Key Points From This Episode:
- What inspired Beardsley to write his new book The Definitive Guide to Underwriting Multi-Family Acquisition
- Breaking down the components of underwriting, starting with the T12 and the rent roll, to figuring out its future potential through use of data and a property management partner.
- Finding your own balance with underwriting tools, and keeping it simple.
- Focusing on next level analysis of certain metrics aside from IRR and cash-on-cash.
- What is a debt service coverage ratio, and using that metric to assess risk and future outcomes.
- The Exit Test, and new loans while your old one is maturing.
- Following the huge new trends in cap rate compression due to the effects of the pandemic.
- The relationship between bond yields during rent inflation and lower cap rates.
- The most important piece in acquisitions right now – rent growth.
- Beardsley's asset management superpower, and realizing the dream of their own in-house property management company, Radiance Living.
- Free underwriting resources available for analyzing property.
Links Mentioned in Today’s Episode:
Rob Beardsley on LinkedIn
The Definitive Guide to Underwriting Multi-Family Acquisition
Lone Star Capital
Asset Management Mastery Facebook Group
Asset Management Mastery website
Best in Class: How to Manage Your Multi-family Asset, Avoid Mistakes and Build Wealth Through Real Estate
Gary Lipsky on LinkedInGarzella Group