3 Simple Steps to Evaluate Any Multifamily Investment in 5 Minutes

Are you interested in investing in multifamily properties? Do you want to be able to evaluate potential deals quickly and efficiently? Discover 3 simple steps to evaluating any multifamily investment. With this method, you will be equipped with the knowledge you need to make informed decisions about pursuing any multifamily deal. Learn more here:
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0:00 Importance of Multifamily Metrics and a Decision-Making Framework
1:18 Deal Assumptions: Estimating Expenses and Default Mortgage Terms
3:10 Questions? Text PETER to 833-942-4516
3:20 3 Simple Steps to Evaluating Multifamily
4:07 Step 1: Gather Property Information - Gross Rental Income, Effective Gross Income, Operating Expenses, NOI, Annual Debt Service
7:20 Step 2: Calculate Multifamily Metrics - Cash Flow, Cash on Cash Return, Deal Cap Rate
9:03 Step 3: Decision Framework - "Go or No Go" Standards
12:10 Summary of 3 Simple Steps to Evaluating Multifamily

[@CommercialPropertyAdvisors]

Every successful multifamily investor has a mentor. Get your mentor here: www.commercialpropertyadvisors.com/protege-program/

[@dotunogunwale7138]

35% for expenses is extremely hard to find. I’ve done 2000 authentic underwriting on deals in the last 2yrs and I’ve not seen 35% expense yet, the lowest I’ve seen was 44.7% Now that Mr. Peter said it, I’m 1000% motivated to look for one, thanks for the motivation

[@CommercialPropertyAdvisors]

Learn more about how Total Operating Expenses are calculated here: www.commercialpropertyadvisors.com/commercial-real-estate-terms/#opex

[@kennethmartin7138]

This was a good breakdown on how to evaluate multi family properties. Highly informative blueprint! I appreciate your knowledge 💯

[@CommercialPropertyAdvisors]

Thank you!

[@theviewer68]

You’re the best on commercial real estate education

[@CommercialPropertyAdvisors]

You are very kind. I am blessed to be able to do what I love; teach others how to successfully invest in commercial real estate.

[@Kris-ku3xr]

This is awesome! I'm analyzing my first multiunit for purchase and this is very helpful. New sub here

[@CommercialPropertyAdvisors]

Glad it was helpful!

[@joanne19661]

Thank you very much Mr. Harris you wrote the note for teaching others on the board - this reminds me when I was learning best in my high school time wow it’s so awesome to learn & understand. Following to learn more 😃👍💕

[@CommercialPropertyAdvisors]

Glad it was helpful! We appreciate your feedback!

[@GoddessTemple528]

Ty for this video! Super simple and informative! I subscribed to your channel because I love you guys!!!! ❤️♥️❤️♥️

[@CommercialPropertyAdvisors]

Thanks for subscribing!

[@SW-kd9fx]

This is great, thank you! =)

[@CommercialPropertyAdvisors]

You're very welcome!

[@jb8054]

Thank You! for your Kindness and Big Heart

[@CommercialPropertyAdvisors]

You are most welcome!

[@dougreviewstheuniverse9082]

TY!

[@gv8262]

Great video! Clear, precise & to the point! For the COCR calculation, if the building is a value add I'm assuming we'd add deferred maintenance or CAPEX in with the down payment?

[@jesuspaiditall8923]

Great video, and thank you very much!

[@CommercialPropertyAdvisors]

Glad you liked it!

[@be.amazingkelly]

Great info, thank you and YES.....evaluation done in less than 5

[@CommercialPropertyAdvisors]

Thanks for watching!

[@kennethmartin7138]

Excellent video!!! Thank you for this information 💯!!!

[@CommercialPropertyAdvisors]

My pleasure!!

[@superpowerforhire]

Thanks Peter!!!

[@CommercialPropertyAdvisors]

You are most welcome!

[@andrewcohen8627]

Thank you great video!!!!! I learned alot from your videos.

[@CommercialPropertyAdvisors]

Glad to hear it!

[@BestMove28]

Great Info‼️. Thanks

[@CommercialPropertyAdvisors]

Glad it was helpful!

[@ELconomics101]

Hey mr.harris always good to watch the videos you've done over the years I learned a lot from them in the crei

[@CommercialPropertyAdvisors]

Marvelous! Thanks for the comment.

[@aftech7268]

Awesome lesson

[@CommercialPropertyAdvisors]

Thanks

[@Trinibrethren]

Great great information sir thank you

[@CommercialPropertyAdvisors]

Thanks for the compliment!

[@rpietryk4690]

Thank you

[@CommercialPropertyAdvisors]

You're welcome

[@r.5108]

great job

[@CommercialPropertyAdvisors]

Much appreciated

[@antoniostephano]

Doesn't your book say that 50% is the average for expenses? Aren't most banks requiring 30-35% down on these types deals. And isn't debt closer to 7,5%? These changes make a big difference in the underwriting and render this not such a good deal. Expenses are go mg up not down. Pencils down?

[@CommercialPropertyAdvisors]

The expenses rule of thumb is getting a lot of feedback on this video. Some argue that the 35% rule is best applied to under 10 units. Whereas above 10 units, 40-45%. For this video, I was trying to keep it simple. Lending underwriters use 35% as their rule of thumb.

[@rpietryk4690]

These are best easy to understand loose info

[@CommercialPropertyAdvisors]

Thanks

[@ragirags]

how did you calculate mortgage for 25 years at 6.5 % for 750k?

[@dwightmonteith5455]

When you’re calculating cash on cash return do you include closing cost as money invested? In the example you have the down payment

[@CommercialPropertyAdvisors]

Yes! Include any closing costs that were added to the down payment on the closing statement because it's part of your original investment

[@benreiltd.2528]

Why short the process timing when it still took 5 min to get the metrics etc? To be able to do all of that in 10-15 min is still good when it comes to commercial property investing. 😎 thanks again

[@CommercialPropertyAdvisors]

If it sounds good after 5 minutes, then dig in deeper. You can always spend more time evaluating a deal but if it doesn't have some merit in the first 5 minutes, it rarely gets better the longer you investigate.

[@morftalk]

When you talk about expenses - you mean HOA, Property Tax and fixing cost all included in that 35%?

[@Kris-ku3xr]

Do you typically just ask your RE agent for the cap rate in an area? ....or is this info available to non-agents?

[@CommercialPropertyAdvisors]

Yes! Ask local brokers and appraisers but also don't forget to try out AI too. This video explains: kzbin.info/www/bejne/rYmzaolrpN-AoLs

[@Kris-ku3xr]

This is great! Just watched the video. Thanks for being so helpful.

[@bjt1970You]

Why do you use a 25-year amortization period?

[@CommercialPropertyAdvisors]

Most lenders will not allow 30 Am loans. 25 years is usually the max.

[@eugenehammond6225]

👑

[@CommercialPropertyAdvisors]

It's humbling to get that. Thank you.

[@gregoryfluellen4831]

What happened to 50% for expenses Peter? Especially in this environment

[@CommercialPropertyAdvisors]

The expenses rule of thumb is getting a lot of feedback on this video. Some argue that the 35% rule is best applied to under 10 units. Whereas above 10 units, 40-45%. For this video, I was trying to keep it simple. Lending underwriters use 35% as their rule of thumb.

[@vivienhounsounou1867]

GOLD

[@zach3338]

$5,406 X 12 = $64,872 🤷🏼‍♂️

[@brandonlifefamily8331]

Probably didn't clear his calculator but the basic principle still applies, cash flow around 24k instead of 28k. Still about 9% return on your money vs bank at about 5% there are other advantages like tax depreciation, and equity growth, looks like a solid deal, but if you had a hard money loan at 10% for down payment it would be negative so it's not a start with no money deal.

[@bohdan4772]

I’ve only seen 35% on pro forma’s which were a long shot from the truth

[@CommercialPropertyAdvisors]

The expenses rule of thumb is getting a lot of feedback on this video. Some argue that the 35% rule is best applied to under 10 units. Whereas above 10 units, 40-45%. For this video, I was trying to keep it simple. Lending underwriters use 35% as their rule of thumb.

[@Keyman102976]

I think the annual debt service calculation may be off. Monthly payment = $4,062/month ($48,744 annually). I based this off $750,000 loan, 6.5%, 25y Amortization

[@karl-lo1up]

Grandpa