Passive Real Estate Strategies

Signs That A Deal Is Underwritten Too Aggressively

January 02, 2023 Justin Moy
Passive Real Estate Strategies
Signs That A Deal Is Underwritten Too Aggressively
Show Notes

Are you looking to maximize your returns when investing in real estate? In this episode, Justin dives deep into one of the most essential elements for passive real estate investors - underwriting. He explains that aggressive underwriting is something to be avoided, and shares two key components to look for when analyzing a deal. Join us to learn more about how these components can help you maximize your profits when investing in real estate, especially with value add deals where the cap rate is compressed. Listen and enjoy!

Key Highlights: 

[00:01 - 05:14] Things to Look for When Analyzing a Deal

• Passive investors should have a basic understanding of underwriting to avoid red flags

• Two biggest items to look for when analyzing a deal

  • Annual organic rent growth projections
  •  The exit cap rate or cap rate at sale and how it's measured

Key Quotes: 

"Aggressive underwriting can lead to miss projections or even loss of capital." - Justin Moy

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