Financial Underwriting

Once our acquisitions team has completed the initial due diligence on a deal and it passes the initial review, it is then sent to our financial team for further review. It’s then run through a comprehensive analysis to ensure it meets our strict and conservative criteria. This analysis includes but is not limited to:

• Stress Testing – Can the property hit 60% occupancy or less, and still meet all financial obligations?
• Modeling significant operating reserves – Will the business plan’s operating reserves cover 8+ months of no income in a highly unlikely catastrophic/economic event?
• Projecting conservative exit returns
• Renovation/Value Add Plan – Vet and verify operating and capital expenditures – based on local trade rates, property management input, and decades of professional experience.
• Conservative occupancy rates compared to market – modeling less than market occupancy markets
• Conservative rental rates compared to like-kind assets in the subject market
• Plan for a conservative stabilization timeline