571: Is This Deal Worth My Time? The 6 Crucial Steps to Vet a Multifamily Deal

BiggerPockets Real Estate Podcast

BiggerPockets

Investing, Education, Business

4.8 • 16.6K Ratings

🗓️ 15 February 2022

⏱️ 75 minutes

🔗️ Recording | iTunes | RSS

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Summary

Real estate underwriting isn’t a commonly used term within the residential world. If you’re used to dealing with single-family homes, duplexes, triplexes, or quadplexes, you’ve probably done real estate underwriting to some degree, but you’ve called it “real estate analysis”. In both scenarios, investors are looking at what they’ll make on a deal, how much they need to invest, and what exit strategies they have. But, in a hot housing market, like we’re in today, by the time you analyze a deal, a deal may already be gone. You need a way to quickly sort deals into the “pursue” or “dump” piles, and Andrew Cushman, expert multifamily investor, may have just the solution for you. Andrew has been on the BiggerPockets podcast before and manages over 2,600 units, so he definitely knows what he’s talking about! Today, Andrew showcases the phase one underwriting he uses to decide quickly on deals, as well as the four levers to look at before even getting into underwriting. His system can save you hours, or even days, if you’re a full-time investor, and it helps rookie investors quickly analyze deals so they can get into the game. Now, residential owners can transition into commercial real estate with better scale and bigger profits. In This Episode We Cover: How Andrew scaled from zero to 2,600 units in only ten years The basic screening process that allows you to triage your deals and waste less time Four levers every investor should look at when analyzing a new deal The six factors of phase one multifamily underwriting and using it to unlock “home runs” Developing and nurturing broker relationships so you can get off-market deals before your competition And So Much More! Links from the Show BiggerPockets Forums BiggerPockets Podcast 169: Using Hustle and Persistence to Build Wealth Through Real Estate with David Greene BiggerPockets Podcast 170: The Journey From Flipping Houses to Owning 1,470 Units with Andrew Cushman BiggerPockets Podcast 270: Turning Your Primary Residence Into 40 Units & Financial Independence with Amy Arata How to Find Overlooked Opportunities in a Hot Market with Andrew Cushman Hal Elrod's Website BiggerPockets Calculators Submit your Question for an upcoming Seeing Greene episode! CoStar ESRI LoopNet Invest with David Greene David's Instagram Check the full show notes here: https://www.biggerpockets.com/show571 Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	This is the bigger Pockets podcast show 571.
0:05.0	What that does is that takes the 10 deals sitting in your inbox on Monday morning and whittles it down to the two,
0:12.2	then want to go to phase one underwriting them.
0:14.7	So that's helping you narrow your final and focus on the stuff that has the highest probability of working for you.
0:19.6	What's up everybody? It is your co-host David Green and welcome to the best real estate podcast on earth.
0:33.6	We have an awesome show today if you are interested in practical, tactical, detailed advice on how to invest in multi-family property.
0:43.6	Welcome to the bigger Pockets podcast where it is our job to help you achieve financial freedom through real estate.
0:49.6	We do that by bringing in experts in the field to have a lot of value to add in this space to teach you for free.
0:55.6	How you can also use real estate to build your wealth as long as you take action and completely commit to the purpose that you have decided which is financial freedom.
1:04.6	You want it badly so do I. Let's do it together.
1:08.6	Now today is a special guest and he's special for several reasons for one. He's one of my best friends.
1:14.6	We have bigger pockets repeat guest Andrew Cushman. He was on two episodes before this one and we're sort of continuing in that theme.
1:22.6	Now he's kind of a special guest because we came into the podcast at almost the same time.
1:26.6	I was interviewed for the very first time on bigger pockets show 169. Andrew is on 170.
1:33.6	So that was pretty cool. Then he got into the commercial investing and I got into single family investing.
1:39.6	And Andrew became the partner that I invest in when I do multi-family deals.
1:43.6	So if you ever hear me talk about a multi-family apartment that I'm buying in or partnering in it's all through Andrew.
1:48.6	Now also Andrew was a huge inspiration in the long distance real estate investing book.
1:53.6	He's someone that I would go to to learn the screening criteria that he's using for multi-family and that I adopted it into my long distance investing for single family.
2:02.6	So a lot of that information I get about where people are moving to where jobs are, what I want the median income to be.
2:08.6	The stuff that I teach in long distance real estate investing. It was inspired and a lot of it came from Andrew Cushman.
2:14.6	He's a very, very smart guy. It's why I partner with him on multi-family deals.
	...

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