Multifamily Investing Underwriting 101 - Top Tips for 2023

So you want to buy an apartment building - fabulous! But where to start? Most struggle out of the gate in the underwriting process, and mistakes are very costly at this stage, so where to start?

Get my top 7 FREE Tips for apartment investing HERE: https://www.therealestateoutlook.com/7-tips

Mike and I lay it all out in black and white for newbies and veterans alike. Like and comment and lets get this discussion going!

Show Notes:

00:00 Introduction - What are the 5 STEPS to underwrite a multifamily deal? Rookie mistakes that are easy to avoid and the importance of doing your own proforma.

3:22 Underwriting Challenges - CAP rate used to be the go-to metric, now a secondary consideration at purchase. DSCR (Debt Service Coverage Ratio) is the metric you need to master. Loans have been drastically reduced in recent months.

5:27 Stress Test - create your own stress test and stick to it. A large cushion is required due to rapidly rising expenses.

6:46 All inclusive rent - in most cases, the landlord pays for everything except the tenants power. Expenses have been rising rapidly, especially heat with the added carbon tax.

9:15 Lending - CMHC vs. Conventional? MLI Select? What options do investors have today? Lender scrutiny is at an all time high - what you need for your loan application and how does that affect your joint venture partners?

15:47 Biggest Change - Bridge Loans, or BRRRR. Be VERY careful in 2023. With very high rates this strategy is risky today. Vendor or creative financing is the better way to do value add.

I hope you enjoyed the video! If you want to learn more about multifamily investing, set up a call with me here: https://www.6pillarsmultifamily.com/

PS: Join us at the 2023 Real Estate Resilience Virtual Summit to get the INSIDE track on the world of Canadian Real Estate Investing: https://www.accelevents.com/e/resilience2023?aff=Cory


Did you miss our previous article...
https://trendinginrealestate.com/multifamily-investing/how-to-buy-your-first-apartment-building