For every property we purchase, we will look through a hundred deals, perform a deeper underwriting on half of them, submitting offers on third of these, and only get close on a few before selecting only the project that offers the highest reward for the least risk.
We are extremely diligent in the deals we acquire and make sure we put any potential property we’re interested in through our extensive underwriting process and exhaustive due diligence. We’ll spend multiple days on-site with our management team walking the units during the physical inspections, with our contractors outlining the scope of work and getting proposals for the physical upgrade work well before our 30 day diligence window expires, as well as digging into the market to understand where the rent comps are in relation to our vintage of asset and how we can improve the property to push rents to this level. On top of that, we underwrite to very conservative figures on both income and expenses, as well as running our proformas through multiple worst case scenarios, making sure the deal works in extreme circumstances.
Our Target Indicators Include:
- High Investor Returns for Low Risk
- Various Exit Strategies (If we can't refinance in Year 3 and payoff mortgage we won't do the deal)
- Low Breakeven Occupancy
- Quarterly Cash Flow Distributions to Investors within 12-18 Months
- Capital Preservation