BiggerPockets Real Estate Podcast 571: Is This Deal Worth My Time? The 6 Crucial Steps to Vet a Multifamily Deal
Feb 15, 2022
Andrew Cushman, an expert multifamily investor managing over 2,600 units, shares valuable insights on vetting multifamily deals. He introduces his six-step system that allows investors to quickly triage opportunities in a competitive market. Andrew emphasizes four critical levers to consider before diving into detailed analysis. He discusses the importance of understanding rental growth, cap rates, and realistic revenue projections to avoid common pitfalls. Listeners learn how to transition from residential to commercial investments for greater scale and profit.
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Efficient Deal Screening
- Quickly screen potential deals to save time and energy.
- Look for reasons to say no, filtering down to the most promising opportunities.
Key Levers of IRR
- Four key levers significantly impact a property's IRR: market rent, cap rate, sale time, and leverage.
- Understanding these levers helps investors make informed decisions and avoid misleading projections.
Understanding IRR
- Internal Rate of Return (IRR) considers an investment's profits over time and other factors like loan paydown.
- IRR helps compare different investments, but be cautious, as it can be easily manipulated.
