Course 1.0 – Week 2 Lesson 2: Basic Underwriting Concepts, Part 1 (Income)
In this lesson, we discuss how to underwrite a property’s income.
Underwriting a deal means to evaluate it from a financial perspective and to make reasonable projections based on your plan for the property.
Underwriting is one of the most important skills you must learn if you want to invest in MFRE successfully. In this lesson, we discuss how to underwrite a property’s income. Using the financials from an actual deal (provided), we will cover some underwriting basics, including what you need to look for in the financials, what is often left out that you need to add into your underwriting model, some standard underwriting assumptions, and some rules of thumb to follow in a pinch.
Lesson 2 Action Steps
(1) Have a pen & your notebook ready to take notes and write down questions for the private Facebook group or monthly Q&A call
(2) Review the provided historical financials and rent rolls for the Addison property provided in the Resources tab to become familiar with them before the next lesson.