How to Analyze a Multifamily Property & What Could Kill a Deal

Want to know how to analyze a multifamily property? Maybe you’ve analyzed duplexes, triplexes, quadplexes, or even ten-unit apartment complexes before, but what about the big deals? We’re talking about multi-million dollar multifamily investments, with hundreds of units, large debt and equity structures, and many, many small pain points only experienced investors would notice.
If you’re looking for an in-depth overview of how to find, analyze, and buy a large multifamily property so you can build passive income and serious equity growth, then Andrew Cushman is the man to talk to. Andrew is so good at what he does that he's partnered up with BiggerPockets Podcast host, David Greene, to invest together.
In Andrew’s previous episode, he touched on the “phase I underwriting” that comes with analyzing a multifamily deal. In this episode, Andrew focuses on what investors should do after they’ve triaged their deals and are left with only the best in the bunch. Andrew spent years worth of time analyzing deals to come up with these eight steps. He shares them today so you can have less headache and more investing success than when he started!
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Visuals from Today’s Episode:
Rent Increases: drive.google.com/file/d/1K0t1...
Loss to Lease: drive.google.com/file/d/1utSY...
Debt Quote: drive.google.com/file/d/1IZrk...
Property Taxes: drive.google.com/file/d/1qfs2...
Renovation Budget: docs.google.com/spreadsheets/...
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Listen to Andrew's Past Episodes on The BiggerPockets Podcast:
170: www.biggerpockets.com/blog/20...
279: www.biggerpockets.com/blog/bp...
571 (Part 1 of This Episode!) : www.biggerpockets.com/blog/bi...
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Ask Your Underwriting Questions on the BiggerPockets Forums:
www.biggerpockets.com/forums?...
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Invest with David on Future Deals:
Investwithdavidgreene.com
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Sign Up for a David Greene Webinar:
www.davidgreenewebinar.com/we...
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Learn More About Vantage Point Acquisitions:
www.vpacq.com/
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Connect with Andrew and David on BiggerPockets:
Andrew: www.biggerpockets.com/users/a...
David: www.biggerpockets.com/users/d...
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Follow David on Instagram:
@davidgreene24 or / davidgreene24
Episode 586
Show notes at: www.biggerpockets.com/blog/re...
00:00 Intro
02:26 Quick Tip
03:14 Recapping Phase I Underwriting
10:52 Step 1. Rent Increases
17:50 Step 2. Loss to Lease
29:43 Step 3. Debt Quotes & Loan Terms
45:58 Step 4. Insurance Quotes
52:34 Step 5. Property Taxes
58:04 Step 6. Property Manager's Opinion
1:00:59 Step 7. Renovation Budget
1:05:49 Step 8. Follow Up On P&Ls
1:11:20 Reviewing the 8 Steps of Multifamily Underwriting
1:15:22 Andrew's Current Deals
1:18:15 Phase 3. Making the Offer!

[@JeffWybo]

I love to know my ARV’s and buy based on unit pricing. I’ve been able to acquire over 250 units and am currently BRRRR’ing them. Full time, managers and contractors on salary. Love MultiFamily!

[@joshengen4480]

Love the videos from you and Matt McKeever @jeff. I hope BP will have you both on the podcast one day. Cheers!

[@JeffWybo]

@@joshengen4480 thanks Josh. 🙌

[@badbwoytrini]

I aspire to be on your level one day. Would love to pick your brain when time permits

[@debmiller1534]

it would be really helpful for first timers, if there were a glossary for multi fam financing and checklists.

[@helloromie]

Even on full screen, the slides and charts are very blurry 30:30 The message and information is very appreciated though. Thank you Andrew Cushman.

[@samyin330]

Absolutely perfect. Thank you for the episode. I will use a few of these in my future underwriting. Please do more of these.

[@niyainc.-wealthrealestatet3629]

Thank you BP! I am actually planning to vlog my process of selling my condo, evaluating properties, and purchasing a fourplex with an FHA in a high cost area (L.A) with the goal of buying bigger properties

[@johnnyb33good21]

Have you already been pre-approved for FHA for a fourplex in LA? I'm looking into using my VA home loan or FHA for a fourplex in San Diego County which is another high-cost area

[@niyainc.-wealthrealestatet3629]

@@johnnyb33good21 Hi Jonny, I am only at the stage of searching for a fourplex (there is low supply) then I will shop for mortgages….I am actually going to document it all on my channel because I want to make the process easier for others who want to use FHA

[@johnnyb33good21]

@Niya Inc. - Wealth, Real Estate, Travel, Family I'm in the process of submitting my documents to get pre-approved at the moment just to see what I can qualify for as purchase price. I don't want to be looking at fourplexes that are over $2 million if I'm only qualified for $1.6 million. And you're right about that super low Supply

[@niyainc.-wealthrealestatet3629]

@@johnnyb33good21 yes I know FHA loan limits are a bummer in high cost areas like ours….have you considered the 203k fha loan? Where you can get a run down fourplex and renovate it

[@johnnyb33good21]

@@niyainc.-wealthrealestatet3629 no I haven't even thought about the FHA 203K That'd be awesome if I could also get renovation funds

[@nico_gg_8863]

I am dead! I can’t believe there is so much I had no idea of. That’s why I love this podcasts

[@hbcomcn]

Thank you both, this is like in the University, you finally meet that professor makes you feel I am educated!

[@dushyank]

Fantastic video, watched the entire video and learned something every second. These guys knowledgeable, intelligent, great communicators, great presence of mind. I will owe a lot my successes to these guys.

[@mkrashid2405]

Guys...Very Solid Information!! Thanks for Sharing!!

[@AlejandroAlvarez-fc3sh]

Great episode! Would you invest in hurricane zones such as Houston or Floridas' cities? What are your thoughts!? Best!

[@fabiandennis1247]

you should Take all stats snag the Title Upload the B4 and After Pics of the property turn your real estate portfolio... into An NFT monopoly board game Card ErTH Globe Edition.. hook it up with 7 percent and i only work weekends.. lol IP

[@gregwood1979]

you guys should get Alex Hormozi on the show, he would be super interesting to listen to on his take on multi family investing.he loves liquid cash,and deploying money for his businesses,so he needs access to his funds asap....i would love to learn from alex!!!

[@SSB-gq5tu]

David your a very affective versatile speaker sir good job

[@marcuslittle9506]

Is that a pair of shoes in David's trophy case? I'm sure there's a real estate metaphor here somewhere.

[@RichHamilton777]

FANTASTIC episode

[@bentedla4159]

Great way to start the morning!

[@user-nc4cx4gw2z]

Hello there!

[@SSB-gq5tu]

Good video man wealth of knowledge.

[@RobWilliams007]

David, I mentioned this to you before, your mic amp or computer is set too hot and you are distorting easily. You can also put on a limiter. Just trying to help.

[@fabiandennis1247]

is this like High School Where you change ya Grade from F to B+ or C+...Do tryna figure this all out OK OK Crypto wise this is like a Smart Contract but it the actual county you were just Updating the morgage so that the note would Clear Customs/them grading how risky you are as a borrowerer but Future Dated to release title once time expires and numbers or margins must be exact

[@BJNeyer]

That's called adjusted valuation. In Kansas, residential propety is (Market value * 11.5%) * Mil levy = taxes due. If you have an empty lot, residential or not, you're taxed at 12%. Commercial is taxed at 25%. Kansas actually throws a real curve ball into the calculation. They exhempt the first $20K of residential value from the base school mil levy of 20 mils. They are going to increase that to $50K. Forget math, you need to have a degree in Calculus to figure Kansas property taxes.

[@kennethkirklin6959]

That's why I'm leaving Douglas County and all the Crazy Libs who run Lawrence

[@michaelritter6004]

That’s a lot to take in

[@GR.33.]

Notes: 9:23, 15:59, 17:50, 29:43, 45:58

[@RobWilliams007]

To me, I would think that, generally speaking, to go in with less down even if your profit is less per month. Because either way, you’re out that money but one is up front and the other over time. I understand that the risks are different.

[@Paragon_Reason]

So many things are so confusing. One video will say insurance is overpriced and you save by not having it, and you can take the hit if anything happens, then another video will say It's SOO ImPoRtAnt to get insurance...

[@bronjames4346]

Would you buy a multifamily with 50$ of negative cashflow on a house hack. If you are technically paying lower rent yourself.

[@hermanhaertner4614]

Real Estate expansion is helping fuel the resource market. Uranium and Clean Nuclear Energy is the place to be. It's almost ready to be banned by USA and RUSSIA because of the war. And it is a clean energy that both republicans and democrats actually agree on. If you are not familiar with the sector, then grab an ETF like URA or URNM. Enjoy! It's just another option to add to the portfolio.

[@IamAlan867]

To be fair, yes the government did keep the market afloat, but ONLY because the government shut down the market....sooo.

[@avoid222]

Pretty good podcast but the host just talks to much and goes off topic so much

[@fabiandennis1247]

Absolutely Gonna Figure This All OUT And Imma Never get rained on Again Stupid Commas

[@nico_gg_8863]

I am dead! I can’t believe there is so much I had no idea of. That’s why I love this podcasts